The Week Ahead: Cold front sweeps into City as retailers offer weather report

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The anecdotal evidence has not been good, and this week we should get the concrete proof. Concerns are growing that the erratic summer weather, warm September and five interest rate rises in less than a year have been bad for the high street. Fashion retailers are thought to have been hit hardest, meaning that the interim figures on Tuesday from Next will be pored over.

The anecdotal evidence has not been good, and this week we should get the concrete proof. Concerns are growing that the erratic summer weather, warm September and five interest rate rises in less than a year have been bad for the high street. Fashion retailers are thought to have been hit hardest, meaning that the interim figures on Tuesday from Next will be pored over.

The actual numbers are likely to be good, with pre-tax profits up from £123m to £151m. It is current trading that will elicit most interest, and sales growth is expected to have slowed from the underlying rate of 3.1 per cent seen in the first quarter. However, Next is a City favourite and analysts remain confident about its long-term performance, and that margins will have held up.

Also reporting is Next's rival French Connection, where the story should be similar. The numbers are likely to be positive, with pre-tax profits before charges up from £13.7m to around £15m. But an update on current trading will be more important.

Thanks to the volatile summer weather, customers have either stayed at home and out of the rain, or been unsure what to buy when they have ventured on to the high street. The warm weather of the past couple of weeks will have added to the confusion; most retailers have had their full autumn ranges on sale for some time now.

Kingfisher is also reporting interims, but the owner of B&Q is unlikely to have suffered as much as the fashion chains. Instead, the area of concern is an apparent slowdown in the housing market, leading to weaker demand for DIY goods.

Investors will also want an update on Castorama, its French outfit, and on market rumours that B&Q plans to open in China via the acquisition of US group PriceSmart, which operates about 10 outlets in the country. Analysts have pencilled in pre-tax profits of £341m against last year's £289m.

Earlier this year, convenience food and salad supplier Geest - which supplies the supermarket sector - warned on profits, which have been hit by weak demand. Most believe it will retain this cautious note at the interim presentation later this week, particularly as the wet summer could have affected the nation's desire for salads and dips.

Likely to be less gloomy about the weather is John Lewis. The partnership produces interim numbers on Thursday, but department stores traditionally escape the worst effects of unpredictable weather because of the broad range of products they carry. Furthermore, Waitrose is understood to be doing particularly well: recent figures by research group Taylor Nelson Sofres showed a 10 per cent boost in sales and a rise in market share, up to 3.2 per cent, in the 12 weeks to 15 August.

Running beside this flurry of retail results is the Government's update on the state of the high street, out on Thursday. It is unlikely to make for cheery reading. As a recent research note by HSBC points out: "The survey of evidence suggests that August's unusually bad weather resulted in another fall in retail sales, and we are forecasting a drop of 0.6 per cent." HSBC is taking a particularly bearish line on the extent of the decline, but few would disagree with a predicted fall.

Also out this week is inflation data for August (likely to show another small dip), an update on unemployment figures and the regular government survey of the housing market.

Away from retail, and the defence group Cobham posts interim results on Tuesday. The business traditionally performs better in the second half because of the timing of procurement orders, but pre-tax profits at this half-year stage are still expected to rise from £54.7m to £60m.

Elsewhere, a trading statement from Daily Mail & General Trust will provide an update on the national and regional newspaper industry, while cruise operator Carnival posts third-quarter numbers. Booking levels have been strong but the recent record highs in the cost of fuel will be an issue.

Overseas, and things take a luxurious turn, with results from LVMH, the owner of Louis Vuitton, Christian Dior and Moët & Chandon; a trading update from Swiss group Richemont, home to Mont Blanc, Cartier and Dunhill; and results from the ostentatious Italian jeweller Bulgari.

Rival luxury group Pinault-Printemps-Redoute recently put out results that missed estimates, dragged down in particular by fashion label Gucci. So European analysts will be watching this latest gaggle of high-end groups closely.

However, while the sector has suffered some setbacks in recent years, most are confident that all three will have positive news to impart this time round.

CALENDAR

Tomorrow 13

UK: Results: (final) Albermarle & Bond; (interim) Deal Group Media, Enterprise, Public Recruitment, Television Corp, TripleArc, Volvere.

Tuesday 14

UK: Results: (F) Caffe Nero, Compel, Glisten, Interior Services, Redrow, Regent Inns; (I) Advanced Medical Solutions, Catlin, Chelford, Clinical Computing, Cobham, French Connection, Future Network, Gresham Computing, Hiscox, Moneybox, Next, Spectris.

Wednesday 15

UK: Results: (F) Eidos, Hercules Property, hotgroup, NetBenefit; (I) Canterbury Foods, Corac, Huntleigh Technology, Mayborn, Omega International, Parity, Restaurant Group, Skyepharma, Sportech, Unite, Xaar.

Thursday 16

UK: Results: (F) 4Less, Antisoma, Isotron, Kier, Ultimate Leisure, Wilmington; (I) Aggreko, Capital & Regional, CODASciSys, Corus, Cox Insurance, Geest, Kingfisher, Premier Oil, Quayle Munro, Trafficmaster, TT electronics.

Friday 17

UK: Results: (F) Provalis; (I) SVB, ukbetting, Vernalis.

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