Week ahead: UK retailers and grocers to steal the show
Trading updates from UK grocery giants will dominate a lot of the newsflow next week, with statements due from Sainsbury, Tesco and M&S as the market waits to see what impact Christmas trading has had on full-year expectations, while UK retail sales and a bunch of updates from high street names will also be on tap.
First up is Sainsbury on Wednesday with an update on third-quarter trading, where analysts at Jefferies forecast an acceleration in grocery sales growth to 9.5% from 8.9% in the second quarter. However, total like-for-like sales excluding fuel are expected to grow by 7.6%, weighed down by a 3% drop in clothing sales.
Tesco will deliver its trading update for the 19 weeks to 6 January on Thursday. Analysts at Citi said they expect Tesco to report strong third-quarter trading, with UK like-for-like sales up 7.5%, but said there was upside risk to full-year profit forecasts on the back of market share gains and "lingering" food inflation.
"Market share data continues to show a rational inflationary picture and recovery in mix/volumes are being well-capitalised on by both TSCO and SBRY," Jefferies said.
Marks & Spencer will also report a Christmas trading update on Thursday, with all eyes on whether the retailer will say anything about full-year guidance after November's positive first-half results "when some analysts felt management were doing their best to put a lid on expectations, so that they did not get too carried away", according to AJ Bell.
"M&S made £360 million in underlying pre-tax profit in the first half and over the last ten years it has made an average of £100 million more in the second half, thanks in part to Christmas. This is why some analysts argued M&S was sandbagging the numbers," AJ Bell said.
Also scheduled are third-quarter results from discount retailer B&M, interim results from Games Workshop and full-year figures from Shoe Zone on Tuesday, and a fourth-quarter update from Greggs on Wednesday.
Retail sector indicators are also scheduled for Tuesday, like the BRC-KPMG UK retail sales index for December, and the latest monthly grocery sales numbers from Nielsen.
Further afield, we'll see the start of fourth-quarter earnings season in the US with banking giants JPMorgan Chase, bank of America, Citigroup and Wells Fargo all due to unveil their latest figures on Friday.
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