While the food offering at Marks & Spencer has come on in leaps & bounds under Marc Bolland’s watch, the clothing division remains problematic.
The chief executive’s brow is likely to be knitted even tighter on Tuesday when the socks & knickers seller brings out a trading update that is expected to show cool weather in May and June put a crimp on sales.
Bolland may also come under a bit of pressure from shareholder activists highlighting the handsome remuneration dished out to directors and the contrast with the company’s pay policies for rank and file staff.
“Given events in Europe and the weakness of the euro the market will also be looking for an update on whether M&S has suffered any impact. On a more positive note, online sales have been growing recently and there are expectations that this should continue,” suggests Sheridan Admans, investment research manager at The Share Centre.
Talking of online sales of clothing, that’s the stock in trade of AIM glamour stock ASOS, which also has a trading update on Tuesday.
The update covers the group’s fiscal third quarter, and the expectation is that attempts to soup up international sales by employing differential zonal pricing will have resulted in a quarter-on-quarter growth in overseas sales.
The reporting period will cover the April to June period, which last year included a disruptive fire in a warehouse.
Deutsche Bank, which recently upped its price target to 3,600p, expects to see an acceleration in growth rates in the European and North American regions, but the UK operations might offset this, as the comparative period in 2014 saw a lot of heavy discounting, which artificially stimulated growth.
In the rest of the world, the slide in the value of the Aussie dollar and the Russian rouble are likely to slow down growth, the German bank reckons.
Significant announcements expected
Finals: Bacit (LON:BACT), Solid State (LON:SOLI)
Trading update: ASOS (LON:ASC), Marks & Spencer (LON:MKS)
Economic: UK – Industrial production, BRC shop price index, NIESR GDP estimate. US – Consumer credit.