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Can Sports Direct avoid the high street gloom when it updates the market on Thursday

Sports Direct and Ocado will be the next retailers in the spotlight as they both update the market.
Sports Direct store
Its been a busy few months for the sports retailer

Mike Ashley has built his business picking up the laggards of high street retail and there’s been no shortage of those in recent years - SuperDry is likely at the front of attentions, after its latest profit warning on Wednesday - so, he will be looking for his Sports Direct International PLC (LON:SPD) to buck the trend.

Sports Direct has had a busy six months, acquiring both department stores group House of Fraser and Evans Cycles from administrators as he tightens his grip over the beleaguered high street, so its interim results on Thursday will make for interesting reading.

George Salmon, equity analyst at Hargreaves Lansdown pointed out that another strategic change happening at Sports Direct is its ‘Selfridges of Sport’ strategy, which means the group is investing in improving its store appearances.

Salmon said: “While these new stores are said to be helping business, we’re yet to actually see proof of that in the numbers, so investors will be keen to know if this facelift really is showing results.”

The analyst added: “The other thing we’ll be taking notes on is group debt. Those estate updates, acquisitions, and a chunky £114mln share buyback programme, saw half-year net debt more than double to £397.1mln. Signs that’s on its way down, or at least staying flat, would be welcome.”

Ocado earnings to be hit by international deal investments

Online grocer Ocado Group PLC (LON:OCD) has signed a number of partnerships with big international names recently, meaning it has had to spend more on warehouses and technology.

The company supplies automated warehouses and e-commerce software to supermarkets, including Kroger, Canada’s Sobeys and Sweden’s ICA.

The extra investment involved in getting online grocery operations up and running for the company’s partners is expected to hit earnings this year.

Analysts predict Ocado will confirm this when it releases a fourth quarter trading on Thursday.

Ocado’s own online grocery delivery business has been slowing of late so investors will be looking out for progress on its new distribution centres for its partnerships.

TUI to shrug off summer heatwave that burned Thomas Cook

On the corporate front, travel firms will be in focus again, with blue chip TUI AG (LON:TUI) following troubled rival Thomas Cook Group PLC ‘s (LON:TCG) dire trading update with its latest full-year results on Thursday

TUI issued a reassuring trading update in September despite the summer heatwave leading to more staycations in the UK.

In that last update, the holidays group said it continues to expect underlying earnings to rise at least 10% at constant currency this year even though it sees the Turkish Lira having a bigger impact than previously anticipated.

The group said its strategy of having a balanced portfolio of hotels and resorts in a number of destinations continued to pay off while it has seen the benefits of a return to demand for trips to Turkey and North Africa as well as increased popularity of Greek holidays.

TUI’s full-year results are likely to be compared to the performance of Thomas Cook, which posted a fresh profit warning last month.

Graham Spooner, investment research analyst at The Share Centre, pointed out that TUI is a much bigger company with less exposure to the tour operator sector in the UK.

Purplebricks outlook eyed amid UK housing market slowdown

Investors in online real estate agent Purplebricks Group PLC (LON:PURP) will be hoping for a positive outlook when the firm reports its interim results on Thursday.

Most of the key metrics for the first six months were revealed in a trading update in November when the group reported a 20% increase in first-half revenue as it continued to gain market share despite a slowdown in the UK housing market.

At the time, Purplebricks’ chief executive Michael Bruce said the slowdown was “highlighting weaknesses in both some traditional and online agents business models”.

Shareholders will also be on the lookout for news about the company’s US arm and its joint venture with digital publishing house Axel Springer, which in October took a 25.9% stake in Homeday, the dominant online realtor in Germany.

Thursday December 13:

ECB rate decision

Finals: TUI AG (LON:TUI). IntegraFin Holding PLC (LON:IHP)

Interims: Sports Direct PLC (LON:SPD), Purplebricks PLC (LON:PURP), RhythmOne PLC (LON:RTHM), Tungsten Corp. PLC (LON:TUNG)

Trading update: Ocado Group PLC (Q4) (LON:OCDO), Bunzl PLC (LON:BNZL), Serco PLC (LON:SRP), PZ Cussons PLC (Q1) (LON:PZC)

Ex-dividends to clip 1 point off FTSE 100 index: Associated British Foods plc (LON:ABF), 3i Group PLC (LON:III)

Economic data: US weekly jobless claims; US export, import prices


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