Supermarket chains Tesco and J Sainsbury are expected to reveal news of continued sales growth when they post their first-quarter updates this week.
For Sainsbury's, which posted an 11 per cent jump in annual profits in May after a four-year turnaround plan, UBS, forecasts a 6.2 per cent rise in ex-fuel like-for-like sales, while Nomura is predicting a 6.9 per cent hike. Deutsche Bank is pitching its tent in the middle, with a forecast of around 6.5 per cent growth. Tesco's UK business is also expected to grow, albeit at a slower rate, with UBS forecasting a 3 per cent rise in ex-fuel like-for-like sales. Deutsche is slightly ahead with a prediction of 3.5 per cent growth.
"TNS data suggested a solid performance in May, with Tesco's sales increase on four-week data being in line with its peers for the first time since July 2008, although this series can be unreliable when viewed over short periods," UBS said, adding that the company may also benefit from the recent Clubcard re-launch.
Today: Results/updates: Majestic Wine.
Tomorrow: Numis expects investors to focus on the performance of the Premier Inn budget hotel chain when owner Whitbread posts a trading update tomorrow. "At its prelims in April, Whitbread said that Premier Inn trading had 'softened' since the start of the [the 2009/10 full-year period] – although it was 'within the range of market expectations'," the broker said,
"We believe that this suggests that revenue per available room (RevPar) was running between 6 per cent and 10 per cent down on the prior year – which would represent significant outperformance relative to the market. We expect the company to report a fall in first quarter RevPar within this range when it updates."
Numis also weighed in on Ted Baker, the fashion retailer which is due to post an interim management statement tomorrow. Given the recent improvement in trading conditions, the broker is looking for a step up in retail like-for-like sales. "On the flip-side, we would expect wholesale, suffering with the smaller retailers, to show little improvement from the double-digit declines in the second half of last year," the broker said.
Results/updates: Halma, Record Currency Management, Ted Baker, Whitbread and Tesco.
Wednesday: Results/updates: WS Atkins and J Sainsbury.
thursday: Transport group Go-Ahead is due to post a pre-close trading statement later this week, and given that the uncertainty of the South Central re-franchising process had drawn to a close, UBS highlights the likely shift in the market's attention to the underlying performance of the company's core rail and bus businesses.
"Given the ongoing economic weakness, we expect particular focus on UK rail, which slowed down in the third quarter but still provided some growth," the broker said,
"In UK bus, revenues continued to grow well up to the third quarter, and we have no reason to believe this trend will not continue into the fourth quarter."
Deutsche Bank anticipates news of 30 cents in earnings per share when Carnival, the cruise operator behind the Cunard line, posts second-quarter results, although the recent jump in the price of oil may put some pressure on the final figure.
For the full-year period, the broker said, "Fuel is never particularly easy to estimate with regard to Carnival, but assuming guidance for the rest of the year of say $415 per tonne, this would knock around 30 cents off [company guidance for 2009]."
The outlook is likely to be key when Ashtead, the equipment rental group, posts full-year results, according to UBS, which is expecting news of £86m in pre-tax profits, compared to £123m in the year before.
"US competitors have all warned of further deteriorations through the second quarter, with RSC guiding to rental revenues of 35-40 per cent. Speedy Hire put out a very cautious trading statement with their recent results as well,' the broker said,
"We see little prospect of optimistic comments on the 'green shoots' in the economy, since the non-US residential construction market is in the teeth of the recession now."
Also on Thursday, Cadbury is due to post a first-half trading update, and Citigroup is looking forward to news of a "sizeable improvement" in the year-to-date sales picture compared to that in the first quarter.
Results/updates: Ashtead, Cadbury, Carnival and Go-Ahead.
friday: Results/updates: None significant.