The supermarket chain J Sainsbury is due to publish a first-quarter update on Wednesday and analysts expect a more reassuring statement than the recent share-price weakness might suggest.
"Industry growth has been healthy, and, while Sainsbury's has been losing momentum relative to competitors, its spend growth has held up well, helped by non-food growth and food inflation," said Deutsche Bank, which anticipates news of 3.5 per cent like-for-like growth, excluding petrol.
JPMorgan – which said that, while "Sainsbury's trading has not stood out, it has been solid, and considerably better than that of Tesco on an underlying basis" – is more optimistic: the broker forecasts 5 per cent like-for-like growth, excluding petrol, for the first quarter.
"If Sainsbury fulfils our expectations with regard to [first-quarter] trading, it will have reported substantially better like-for-like growth than Tesco for two quarters in row," JP Morgan said. "Although the timing of Tesco and Sainsbury quarters is not exactly the same (and June has a weather benefit), we see it as still having much more momentum than Tesco."
TODAY: Results/Updates: Majestic Wine, Kewill Systems, Abbeycrest and Image Scan Holdings.
TOMORROW: Whitbread, the hospitality group, is due to publish a first-quarter trading statement and, as UBS points out, the focus will fall on like-for-like sales at the newly combined pub-restaurants and hotel division.
"Most investors will be looking for low single-digit (3 per cent) like-for-like sales at hotels/pubs," the broker said. "Significant weakness in this number will be taken as a confirmation that the weak UK consumer is more seriously impacting the business than previously expected and consensus [forecasts] may decline."
Also tomorrow, OMG is due to publish first-half results. Evolution Securities, which maintains a "buy" rating on the company's stock, expects news of continuing progress.
"OMG's target markets are unexposed to the economic cycle. Motion capture systems sell to healthcare customers, film production companies and games studios," the broker said. "Health care is a non-cyclical market, and even if sales of games and cinema tickets suffer during an economic downturn, the number of new films and games produced (and their budgets) is unlikely to change dramatically."
Results/Updates: Focus Solutions, Halma, Thomas Cook, CML Microsystems, Gooch & Housego, Domino Printing Sciences, OMG and Whitbread.
WEDNESDAY: Woolworths is due to report on trading for the 17 weeks to 7 June mid-week and UBS forecasts -1 per cent like-for-like sales in the retailer's main chain.
"Apparel sales may have been affected by the weather, but on the flip side there may be some support from stronger sales in low- margin video games consoles and related software," the broker said.
Unhappily for those seeking an update on the sale of the company's stake in 2E, UBS does not anticipate any details this week.
Results/Updates: RPC, Celsis International, Victoria, Trifast, Misys and J Sainsbury.
THURSDAY: Centrica, the owner of British Gas, is due to publish a first-half trading statement. The company published a detailed interim management statement in May and analysts expect little new information on the energy supplier's performance. The key focus, therefore, will fall on the group's outlook.
"This could include bill increases," UBS said. "Given strong increases in commodity prices, we expect bill increases in the second half of the year. The company could make a comment on the size and timing."
According to the broker, updates may also be forthcoming on customer numbers, the Centrica Energy business and on legacy industrial and commercial gas sales contracts.
Carnival, the cruise operator, is due to publish second-quarter results and, against the backdrop of a rising oil price, the focus will be on costs.
"The crucial test for Carnival is whether it can pass on these higher fuel costs to the consumer," Evolution Securities said. "Our working hypothesis is that two thirds of the increased costs are absorbed by the customer through higher fuel surcharges. The Carnival business model is highly operationally geared and leaves it vulnerable to a downturn."
Owing to higher costs, the broker expects the company to lower its guidance for 2008. "We have lowered our recommendation [on the company's stock] to 'reduce' from 'buy' and share price target to 1,650p from 2,635p as a result of incorporating our new fuel-price assumptions and a more bearish view on macro conditions," Evolution said.
Also on Thursday, Cadbury is due to publish a first-half trading statement.
UBS expects investors to focus on the extent, if any, of the slowdown in organic sales growth from the 7 per cent recorded in the first quarter, the importance of pricing in the company's sales mix and the guidance for full-year margin uplift.
Results/Updates: Cadbury, Carnival, Go-Ahead, GW Pharmaceuticals and Centrica.
FRIDAY: Results/Updates: Reflec.Reuse content