Supermarket sweep begins on Tuesday as the first sector Christmas trading statement of the week lands from Wm Morrison Supermarkets PLC (LON:MRW), with peers J Sainsbury plc (LON:SBRY), Tesco PLC (LON:TSCO) and John Lewis Partnership-owned Waitrose all due to update in the next few days.
The UK’s major food retail chains have all been grappling with tough competition from discounters Aldi and Lidl, higher cost inflation and weaker consumer confidence, and Morrisons is expected to reveal a slowdown in retail like-for-like (LFL) sales growth in the 10 weeks to 7 January, which makes up the bulk of its fourth quarter.
Deutsche Bank predicts a 1.0% increase from Morrisons over the period, compared to a 2.1% rise in the third quarter.
“Morrisons have a very tough comparative to cycle from last year,” the bank’s analysts said, “However, despite potentially disappointing sales at Morrisons, we expect consensus profit expectations to remain resilient.”
More general retail due too
There will also be a continuance of the general retail Christmas updates following on the heels of disappointments from Mothercare plc (LON:MTC) and Debenhams PLC (LON:DEB) and better than expected news from Next Plc (LON:NXT).
On Tuesday, it will the diverse delights of clothing and homewares firm Joules PLC (LON:JOUL), fantasy gaming group Games Workshop PLC (LON:GAW), drinks retailer Majestic Wine PLC (LON:MJW), and floor and wall tiling specialists Topps Tiles Plc (LON:TPT).
Persimmon kicks off building updates
Aside from the retail trading statement deluge, a trio of blue chip housebuilders will also provide updates in the coming data, kicking off with Persimmon PLC (LON:PSN) on Tuesday.
The FTSE 100 listed firm last updated the market in early November 2017 stating that consumer demand had remained strong with all lead indicators remaining positive.
However, the statement disappointed due to the circa 10% fall in active sales outlets due to some planning delays and also a desire to accelerate build production on certain sites.
In a preview, analysts at Numis Securities said they see two foci for the latest update – has Persimmon managed to grow outlet numbers since the last update, and have forward orders for 2018 delivery advanced from the +10% year-on-year levels reported in November particularly in light of the Budget stamp duty cut for first time buyers?
The analysts said they would hope for low single digit growth in average outlets for 2018, and they think Persimmon remains a strong operator and is achieving levels of balance sheet efficiency and margins not seen elsewhere in the sector.
However, they think that this is captured in Persimmon’s current rating, and, furthermore, the exceptionally high level of management remuneration is likely to cast a shadow over the shares through 2018 and could also create problems with senior management retention.
Europe to drive Robert Walters growth
Staffing group Robert Walters PLC (LON:RWA) will also issue a trading statement, less than a month having provided yet another earnings upgrade in a surprise trading on 12 December.
That short statement indicated that full year 2017 pre-tax profits would be materially ahead of current market expectations leading analysts at Numis Securities to raise its forecast to £39.0mln.
The Numis analysts are forecasting Robert Walters to post fourth quarter like-for-like net fee growth of 20% year-on-year, compared to 21% in the third quarter, with Europe the main driver of group growth despite Brexit worries.
Significant events expected on Tuesday:
Trading updates: Wm Morrison Supermarkets PLC (LON:MRW), Joules Group PLC (LON:JOUL); Persimmon PLC (LON:PSN); Robert Walters PLC (LON:RWA), SIG PLC (LON:SHI), Topps Tiles Plc (LON:TPT), Majestic Wine PLC (LON:MJW), Carr’s Group PLC (LON:CARR), Ferrexpo PLC (LON:FXPO)
Interims: Games Workshop PLC (LON:GAW), Ilka PLC (LON:IKA), Stock Spirits Group PLC (LON:STCK)
Finals: Elegant Hotels PLC (LON:EHG); Nexus Infrastructure PLC (LON:NEXS); Safestore Holdings PLC (LON:SAFE)