DIY-focused retailer Kingfisher gives a trading update on Thursday.
Inevitably, Credit Suisse is on the look-out for any signs of a post-Brexit vote slowdown, though it thinks UK house prices will be resilient.
“Moreover the home improvement market looks well-disciplined with B&Q and Homebase reducing space ,” it added.
Fellow Swiss bank UBS predicts second quarter like-for-like (LFL) sales will be up 2% year-on-year, which would represent a slow-down from first quarter growth of 3.6%.
UBS points out that B&Q and Poland were up against tougher comparative figures in the second quarter while in France the focus seems to have been more on gross margin rather than chasing sales in a dull market.
“In the UK, Screwfix is expected to show further strong growth while B&Q should have benefited again from sales flow-back from closed stores, and potential disruption at Homebase as Bunnings get to grips with the business,” UBS said.
The first quarter update suggested good progress on plans to generate £500mln of incremental profit from common product, operational efficiency and digital expansion, UBS noted.
“Given the timing of costs and benefits the first year of material profit uplift will be FY19. Success of the Transformation Plan is the biggest swing factor for the stock, in our view, although there are potential headwinds from the EU vote (slower UK growth), offset by some benefits (currency translation) and some each-way bets (whether Bunnings succeeds with Homebase),” the bank said.
Significant announcements expected
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Trading statement: Kingfisher PLC (LON:KGF)