Wednesday preview: Retail display as Marks, Dixons, Kingfisher all report

Wednesday will see three big UK retail groups reports results: Marks & Spencer, Dixons Carphone and B&Q owner Kingfisher; while the focus Stateside will be on GDP and meeting minutes from the Federal Reserve.

M&S, which earlier this month revealed that the highly respected boardroom figure of Archie Norman will be chairman later this year, is due to report final results, with its last trading update having been January's encouraging set of numbers for the important Christmas quarter.

That update confirmed both Clothing & Home and Food returned like-for-like sales growth during the third quarter, leading management to reiterate full year guidance, but warn that Q4 numbers would be adversely affected by sale timing, a later Easter this year and an ongoing background of uncertain consumer confidence.

Barclays analysts said they expect fourth-quarter LFL of -2.5% for Food and -3.8% for Clothing & Home.

Deutsche Bank forecast a 2.3% decline in Q4 UK LFL sales and a 12% decline in underlying pre-tax profit.

For the full year UBS predicted adjusted PBT of £600m, EPS of 29.7p and a small increase in the full year dividend to 19.0p.

After the kitchen-sinking in the first half, plus potentially additional charges in the second half relating to the
medium term plans to further scale back the international segment, UBS said the focus will be on the strategy to improve performance in Clothing & Home at the same time as continuing to grow the Food business.

Barclays chipped in: "Although there will obviously be a good deal of attention on last year’s financial results, the more important focus will arguably be on any forward-looking commentary – both with respect to the company’s own plans and the state of the wider market. We would especially be looking for an update on the following: gross margin outlook, sales outlook, UK space reorganisation/international exits and interest/tax assumptions for 17/18."

Over at Kingfisher, owner of B&Q and Screwfix in the UK and Castorama and Brico Depot in France, a first quarter update is expected to be slightly stronger than a fourth quarter that yielded 0.7% group LFL growth but not anywhere near the +2.3% seen last year.

UBS advised what to look out for, including any news on the performance of the ONE Kingfisher plan, the extent of any slowdown in the UK and the impact of recent management changes, plus the recovery path to positive LFL in France.

Barclays noted its recent trip with the company to Paris "where they reiterated that France would not be a quick fix and that share losses continued data over the last three months" and said the transformation could yet yield "a few setbacks that are not currently being priced in", but said its data indicated a solid quarter.

Dixons Carphone is expected to publish a fourth-quarter trading update, following several quarters of market share growth but two sets of results that disappointed the market.

Company-collected consensus is for LFL revenues of 1% in the UK & Ireland, flat in the Nordics and up 4.1% in Southern Europe.

UBS said the UK Q4 run rate was expected to slow from the 4-6% range seen over the past few quarters, in part due to the later launch of the Samsung S8, although industry data has also showed appliance sales slipping down the rankings in terms of sub-sector growth.

Minutes to go

The market is extremely confident that minutes from the last Federal Open Markets Committee will confirm that the Fed remains on course to hike rates in their June meeting.

The FOMC did not make any policy changes following the meeting on 2-3 May but in its statement noted that it viewed the slowdown in GDP growth in Q1 as "likely to be transitory".

The FOMC reiterated its expectation that economic conditions would "evolve in a manner that will warrant gradual increases in the federal funds rate".

HSBC said the minutes from the May meeting will be scrutinised closely for information on the FOMC's future plans for its balance sheet, with minutes of the March meeting showing that many of the policymakers thought a change in the Fed's reinvestment policy would "likely be appropriate later this year".

Wednesday May 24

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Crude Oil Inventories (US) (15:30)
Existing Home Sales (US) (15:00)
GFK Consumer Confidence (GER) (07:00)
House Price Index (US) (14:00)
MBA Mortgage Applications (US) (12:00)

FINALS
Babcock International Group, Great Portland Estates, HICL Infrastructure Company Ltd, Hogg Robinson Group, Lombard Risk Management, Marks & Spencer Group, Mediclinic International, Mitie Group, Pennon Group, Schroder Real Estate Investment Trust Ltd, Vectura, Vedanta Resources

INTERIMS
Britvic, Hollywood Bowl Group, Sanderson Group, ZPG Plc

TRADING ANNOUNCEMENTS
Dixons Carphone, Exova Group, Frutarom Industries, HSS Hire Group, Kingfisher, Softcat, Tungsten Corporation

ANNUAL REPORT
Stratex International

SPECIAL DIVIDEND PAYMENT DATE
Paddy Power Betfair

AGMS
Antofagasta, Arrow Global Group, Camper & Nicholsons Marina Investments Ltd., Exova Group , French Connection Group, Fundsmith Emerging Equities Trust , Glencore , Harworth Group, Hilton Food Group, Ibstock , JSC Kazkommertsbank GDR (Reg S), Mercantile Investment Trust (The), Mortgage Advice Bureau (Holdings) , Northern Petroleum, Polypipe Group , Providence Resources, Sherborne Investors (Guernsey) 'B' Limited, Sportech, SQS Software Quality Systems AG, STM Group, Travis Perkins, WANdisco, XLMedia

GMS
Sportech, Toople

FINAL DIVIDEND PAYMENT DATE
Aggreko, Chesnara, Churchill China, Elecosoft, Eurocell , Hunters Property , McColl's Retail Group , Paddy Power Betfair

QUARTERLY PAYMENT DATE
APQ Global Limited, Tetragon Financial Group Limited