The high street will be back in focus in the coming week, with Britain’s biggest retailer Tesco PLC (LON:TSCO) set to unveil first half results, while bakery chain Greggs plc (LON:GRG) will also provide some crumbs of interest.
Analysts at Jefferies are expecting FTSE 100-listed Tesco to publish a set of “upbeat interims” when the supermarket giant updates investors on Wednesday.
James Grzinic and co are looking for “improved cash generation, good Q2 UK like-for-like delivery and a reiteration of the 3.5% to 4% margin ambition”.
A feature for most retailers this results season has been the UK consumer though. Stagnant wage growth and above-target inflation means the public has less spare money in its collective pocket, which Grzinic thinks could weigh on the outlook.
Understandably then, investors will want to hear from Tesco about current trading and its thought on the UK economy.
Tesco is also in the middle of trying to complete its acquisition of Booker Group PLC (LON:BOK), although any comment this time around is unlikely given that the CMA is due to report back in December.
Earlier this year Tesco hinted that it was ready to reinstate the dividend, so shareholders will be keeping their eyes peeled. The interims might come too soon for that though, with most analysts expecting the dividend to return at the end of the year instead.
Healthier options to help Greggs
Meanwhile high street bakery chain Greggs will update investors on Tuesday.
The company saw profits fall in the first half largely as a result of restructuring charges, and shareholders will want to start seeing evidence that the business overhaul is paying off.
Sales actually rose in the opening six months of the year though thanks to new, healthier additions to its menu. With the UK consumer becoming increasingly health-focused, it will be interesting to see if Greggs is planning on introducing any other ‘balanced choice’ products.
Store roll-out plans will also be eyed, with Berenberg claiming last month that Greggs has the potential to increase its store number by “high double digits per annum” in the coming years.
As with other retailers, Greggs said over summer it was aware of “pressures on consumers’ disposable income”, so investors will want to hear about its outlook for the UK consumer and current trading.
Read all about DMGT
A pre-close season trading update from newspapers group Daily Mail & General Trust on Monday should make for interesting reading, particularly after Friday’s move to sell its software business Hobsons' Admissions to Campus Management Corp as part of an effort to focus its portfolio.
In an update in late July, DMGT reported a flat third quarter performance, having seen underlying growth of 1% in the first half, dragged by weakness in its B2B businesses.
In a preview, analysts at Numis Securities said they hope to have seen a little improvement in the group’s B2B performance in the fourth quarter.
They also expect a resilient performance from dmg media against a continued tough market backdrop, while comments on the dmg information business are likely to be a particular focus.
Ferguson name change will focus former Wolseley
Ferguson Plc (LON:FERG) – the blue chip plumbing supplies group formerly known as Wolseley – will report the first results under its new guise on Tuesday.
In a preview, George Salmon, equity analyst at Hargreaves Lansdown noted: “The change away from Wolseley didn’t come about as the result of some form of identity crisis, rather an attempt to more accurately align the group to the its most significant brand in its largest market.“
The analysts said: “With 84% of trading profit coming from the US ‘Ferguson’ branded commercial and residential plumbing supplies business, all eyes will again be on this division. In particular, will the recent bout of hurricanes have any bearing on business activity.”
He added: “Looking further afield, the group may announce what it intends to do with the cash generated by the sale of its Nordic business.”
Hurricanes to wipe out US jobs growth
Once again the last Friday of the new month will bring the latest US jobs data, although the September numbers are likely to show the impact of the hurricanes that battered Texas and Florida during the month.
Hurricane Harvey which blow through Houston might had a slight impact on payrolls growth in August, with the 156,000 jobs added then less than economists had forecast.
But Hurricane Irma, which resulted in major evacuations in Florida and other parts of the southeastern states in September, could wipe out any jobs growth altogether, with economists at Jefferies International expecting the combination of both storms to result in a 45,000 decline in non-farm payrolls.
After leaving interest rates unchanged a fortnight ago, Federal Reserve Chair Janet Yellen said that “payroll employment may be substantially affected in September” by the storms.
But she added that she expected labor market conditions would “strengthen somewhat further” keeping up expectations for a likely US rate hike in December.
Significant events expected on:
Monday October 2:
Trading update: Daily Mail & General Trust PLC (LON:DMGT), ITM Power plc (LON:ITM)
Finals: James Halstead PLC (LON:JHD)
Economic data: UK manufacturing PMI report; US construction spending; US ISM manufacturing survey
Tuesday October 3:
Trading updates: Electrocomponents PLC (LON:ECM), Greggs plc (LON:GRG), ITE Group PLC (LON:ITE)
Finals: Ferguson Plc (LON:FERG), Revolution Bars Group PLC (LON:RBG), SCS Group PLC (LON:SCS), St Ives PLC (LON:SIV)
Economic data: UK construction PMI report
Wednesday October 4:
Finals: Tesco PLC (LON:TSCO), Walker Greenbank plc (LON:WGB)
Interims: Avacta Group Plc (LON:AVCT), Ceres Power Holdings PLC (LON:CWR)
Trading update: Tops Tiles PLC (LON:TPT)
Economic data: UK services PMI report; BRC UK shop price index; US ISM non-manufacturing report
Thursday October 5:
Trading update: Ferrexpo PLC (LON:FXPO)
Finals: DFS Furniture Plc (LON:DFS), SkinBio Therapeutics PLC (LON:SBTX)
Interims: Morses Club Plc (LON:MCL)
Ex-dividend factors: To trim 3.5 points off FTSE 100 index, including British Land Company PLC (LON:BLND), Kingfisher PLC (LON:KGF), Next Plc (LON:NXT), Smith & Nephew PLC (LON:SN.) and WPP PLC (LON:WPP).
Economic data: US weekly jobless, US balance of trade data, US factory orders
Friday October 6:
Economic data: Halifax UK house prices report; US non-farm payrolls, average earnings data