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J Sainsbury and retailers to be among highlights amid busy Thursday schedule

Sainsbury, Superdry and Burberry are among the names in the diary for Thursday.

sainsbury store
Scrutiny will be on the third quarter update

As J Sainsbury plc (LON:SBRY) releases its trading update on Thursday morning the subtext will inevitably be that of a competitive and generally challenging retail market.

In a preview of Sainsbury’s numbers, Hargreaves Lansdown equity analyst, Sophie Lund-Yates noted that the firm’s operating profit has been lately moving in the wrong direction as the group tries to grapple with the disruption caused by German discounters Aldi and Lidl and the threat posed from online, notably after Amazon.com’s acquisition of Whole Foods.

Sainsbury brought high street catalogue retailer Argos last year to get more tills ringing and realise some cost savings, and the signs so far have been good, the analysts said.

The retailer is hoping 90 Argos units will be opened in stores this financial year, and Sainsbury’s third-quarter results should show it is s on track to deliver the £160mln of synergies predicted by next Spring. 

Of course, Lund-Yates added, the main event is Sainsbury’s potential merger with Wal-Mart Inc (NASDAQ:WMT) owned Asda, the fourth biggest UK supermarket chain.

“But,” the analyst said, “while it’s waiting for the thumbs up from regulators, we’re unlikely to hear much on this front. However, we’ll still be on the look-out for any details on what would become the UK’s largest food retailer.”

AstraZenca into the MYSTIC

Away from retail, it wasn’t so long ago that AstraZeneca PLC’s (LON:AZN) drug pipeline was the laughing stock of the pharma world, with nothing coming through to replace its blockbusters whose patents were rapidly coming to an end.

That’s not the case anymore though, with the FTSE 100 firm making more breakthroughs with some of its cancer, diabetes and asthma treatments over the past few months.

Astra’s third-quarter update on Thursday should reflect this progress. After years of falling product sales, things have been picking up again of late and investors will be keen to see if full-year guidance of low single-digital product sales growth has been maintained.

Key to any growth will be its push into emerging markets, especially China, where sales have been soaring.

Overall survival results for the company’s highly-anticipated MYSTIC lung cancer trial are due at some point before the end of the year, so traders will be keeping their eyes peeled for any updates.

Progress eyed for Burberry’s bid to become next Gucci

Looking more upmarket, Burberry Group PLC' (LON:BRBY) has been trying to turn itself into a super-luxury brand, like Gucci and Dior, to boost profit margins amid a difficult retail environment. 

The market will be looking for signs of progress in the move to take the brand more upmarket when Burberry reports its interim results on Thursday.

In a trading update in July, the company posted flat revenue for the first quarter as growth in the Asia Pacific and Americas was offset by weaker tourism spending in the UK and Europe.

The group hopes to improve sales through its latest collection under designer Riccardo Tisci, who was poached from Givenchy in March and appointed chief creative officer.

Tisci unveiled his first collection for Burberry at London fashion week in September.

Burberry is also collaborating with Vivienne Westwood for a collection of re-imagined iconic styles to launch in select stores in December.

HSBC said it expects the first half results to confirm “relatively pedestrian” growth in sales and earnings that are “unlikely enough to generate much investor enthusiasm”.

For the year to March 2019, the bank estimates revenue falling to £2.71bn from £2.73bn last year and earnings (EBITDA) dropping to £575mln from £569mln.

SuperDry under pressure after co-founder threatens to return

SuperDry PLC’s (LON:SDRY) co-founder Julian Dunkerton told the Sunday Times in October that he could return to the fashion retailer because he “can’t sit back and watch 30 years of my life be gently eroded”.

His remarks came after the company warned that its full-year profits could be dragged about £10mln lower due to the impact of foreign exchange rates and unseasonably hot weather hurting demand for its autumn and winter products.

Dunkerton, who left in March, could step in to halt the group’s decline unless it shows vast improvements in its first-half trading update on Thursday.

In his comments to the newspaper, he slammed the retailer’s move to cut its product lines when many competitors were doing the opposite. He also said that he believes the retailer is on the “completely wrong path” after “probably the most disastrous eight months you could imagine”.

The company’s issues have been compounded by a downturn on the high street as more consumers opt to shop online.

Thursday November 8:

Federal Reserve rate decision

Interims: AstraZeneca PLC (Q3) (LON:AZN), Burberry PLC (LON:BRBY), National Grid PLC (LON:NG.), Inmarsat Plc (Q3) (LON:ISAT), Tate & Lyle PLC (LON:TATE), Auto Trader Group PLC (LON:TATE), Wincanton PLC (LON:WIN), 3i Infrastructure PLC (LON:3IN), Renewi PLC (LON:RWI), JZ Capital Partners LIMIted (LON:JZCP)

Finals: Gattacca PLC (LON:GATC), Tracsis PLC (LON:TRCS)

Trading updates: J Sainsbury plc (LON:SBRY), Superdry PLC (LON:SDRY), Coca-Cola HBC PLC (LON:CCH), esure Group PLC (LON:ESUR), IMI PLC (LON:IMI), Derwent London PLC (LON:DLN), Beazley PLC (LON:BZY), Howden Joinery PLC (LON:HWDN), OneSavings Bank PLC (LON:OSB), TI Fluid Systems PLC (LON:TIFS)

Ex-dividends to knock 6.20 points off FTSE 100 index: BP PLC (LON:BP.), Whitbread plc (LON:WTB)

Economic data: US weekly jobless claims

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