Tuesday will be busier in terms of company news, including half-year results from sports retail star JD Sports Fashion PLC (LON:JD.), which cut its final dividend for last year to preserve cash when it last came to the market with final results in July.
At the time the ‘athleisure’ specialist said it was investing further in its main warehouse, near Manchester, as it expects a permanent shift of demand to online shopping following a doubling of digital sales amid the coronavirus pandemic.
Its first half, starting on 2 February, 2020, has been “like no other”, said analysts at Peel Hunt, with strong trading at the beginning, followed by lockdown during which time online did extremely well.
“Of most interest will be how the stores have done since mid-June.
“The evidence of peers in the US is that things have been OK in that territory, and JD will doubtless be at the top end of performance in the UK.”
Also on Tuesday, Fevertree Drinks PLC (LON:FEVR) will release interims where investors will be wanting to see how on-trade demand, which includes restaurants and bars, has performed over the summer after spring was pretty much cancelled due to coronavirus.
The tonic and mixers maker had been struggling during lockdown as the out-of-home segment had accounted for 50% of UK revenue and 70% of US revenue, though sales in the off-trade channel, consisting of supermarkets and shops, has seen growth.
Ashtead, Travis Perkins and construction trends
Ashtead Group PLC (LON:AHT) will report a first-quarter update and builders’ merchant Travis Perkins PLC (LON:TPK) will report half-year results, showing perspectives on the US and UK construction industries respectively.
Analysts at Berenberg say they expect US-focused equipment hire group Ashtead will deliver earnings "well ahead" of consensus expectations across all key profit & loss measures.
"However, the outlook, and any commentary on the balance between project cancellations and new project wins, is likely to be a more important determinant of the share price in the near term," the analysts said in a preview.
While beating Q1 earnings expectations is seen as likely, the medium-term outlook is "much more uncertain", the analysts conceded, as they are concerned about the growing evidence of project cancellations and the sustained weakness in the US architecture billing index for the past five months, a leading indicator of non-residential construction.
As for Travis Perkins, these results will put flesh on the bones of a July update that showed sales for the first six months of the year that were not as bad as expected.
Building companies were forced to slowed development for part of the period, with Travis Perkins like-for-like sales down 20% in the first half, with a 4% fall in the first quarter giving way to a 35% decline in the second.
The focus in these results will be on the bottom line and on trading in July and August, and looking forward, especially given the context of a recovering housing market.
A key determinant of profitability in its Wickes arm will be the strength to which the kitchen market has recovered, analysts say.
Reading the packaging runes
A trading update from packaging group DS Smith PLC (LON:SMDSL) will be of extra interest for the read-through to wider consumer and industrial trends during the pandemic.
Industrial demand undoubtedly took a hit during the lockdown, although there is likely to have been a large offset by e-commerce and consumer goods firms shipping out more packages to customers stuck in their houses.
Meanwhile, costs will also be in focus amid social distancing requirements and disruption to collection and processing networks, which may have increased prices of recycled paper, a key ingredient for cardboard boxes. Costs will also be eyed in relation to any lower volumes.
Major announcements expected on Tuesday 8 September:
Interims: JD Sports Fashion PLC (LON:JD.), Meggitt PLC (LON:MGGT), Fevertree Drinks PLC (LON:FEVR), Travis Perkins PLC (LON:TPK), Vistry Group PLC (LON:VTY), Signature Aviation PLC (LON:SIG), Arix Bioscience PLC (LON:ARIX), Digitalbox PLC (LON:DBOX), DP Eurasia NV (LON:DPEU), Flowtech Fluidpower PLC (LON:FLO), Gaming Realms PLC (LON:GMR), International Personal Finance PLC (LON:IPF), Luceco PLC (LON:LUCE), Michelmersh Brick Holdings Plc (LON:MBH), Midwich Group Plc (LON:MIDW), Nucleus Financial Group PLC (LON:NUC), President Energy PLC (LON:PPC), The Property Franchise Group PLC (LON:TPFG), STM Group PLC (LON:STM), Surgical Innovations Group PLC (LON:SUN)
Economic data: US business optimism