Two companies from pretty different corners of the retail sector will be in focus on Wednesday, Sainsbury’s and Boohoo, while British politics will remain under scrutiny after the Supreme Court ordered Parliament to reconvene.
Following the swatting away of its attempt to merge with Asda earlier this year, J Sainsbury PLC (LON:SBRY) has been forced to look for other ways to improve.
On Wednesday, the grocer’s senior management will be in Southampton to provide a strategic update as part of a much-anticipated presentation to investors about its recent progress.
Analysts at UBS see this update as a catalyst for their ‘buy’ recommendation, expecting management to provide details on selling volumes and recent price reinvestment programmes, as well as on plans for Sainsbury’s Bank, where a former RBS executive was appointed not long ago.
Sainsbury may follow in the recent footsteps of rival Tesco and put its bank’s circa-£1.5bn mortgage book up for sale, according to some media reports.
In justifying its merger with Asda, Sainsbury’s mentioned structural weakness in the face of Amazon, Deliveroo and the ongoing rise of the German limited assortment discounters and British bargain stores, analysts at Shore Capital, like many investors, continues to wonder, “how can Sainsbury's retail offer, therefore, credibly compete?”
Boohoo still bullish?
As it is now the largest company on AIM, Boohoo PLC's (LON:BOO) half-year results are going to be more closely followed than ever.
A bullish trading update in September saw the share price shoot to an all-time high of 283p, and while the stock has pulled back slightly it is still well-above its pre-update levels.
With sales in the full year expected to grow by 33-38%, compared to previous forecasts of 25-30%, investors will be looking to the interims for how the growth breaks down among the firm’s three main brands, boohoo, PrettyLittleThing and Nasty Gal.
Nasty Gal, the smallest sibling, has been the biggest grower so far with revenues up 157% in the first quarter, however, the focus will likely be on boohoo and PrettyLittleThing as they account for 93% of total sales.
Wednesday, September 25:
Finals: Allergy Therapeutics PLC (LON:AGY), Netcall PLC (LON:NET), PRS Reit PLC (LON:PRSR)
Interims: Boohoo PLC (LON:BOO), Ergomed PLC (LON:ERGO), Mi-Pay Group PLC (LON:MPAY), Mission Marketing PLC (LON:TMMG), Wandisco PPLC (LON:WAND), Xlmedia PLC (LON:XLM)
Trading statement: Babcock International PLC (LON:BAB)
AGMs: Tavistock Investments PLC (LON:TAVI), Adept Technology Group PLC (LON:ADT)
Economic data: BoJ policy decision, NZ policy decision, CBI distributive trends, US new home sales