The Week Ahead: Tesco set to reveal first-quarter sales


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The Independent Online

Top of the reporting agenda this week is Tesco, which is set to reveal how first-quarter sales have fared on Friday.

Tesco’s recently installed chief executive Dave Lewis has made it clear he will prioritise volume over margin.

The latest Kantar figures did not make for good reading for the struggling supermarket giant. Its sales keep falling while Morrisons posted its first rise in sales for 18 months.

Analysts are expecting the update to show that Tesco’s tentative recovery has stalled, with forecasts of a 2-3 per cent fall in sales compared to a 1.2 per cent decline in the previous quarter. An aggressive vouchering campaign in the same period last year will provide tough comparatives for the group, according to analysts.

Investors will also be searching for clues as to Tesco’s plans for its Korean business, which it is reportedly looking to offload.

Last year, shares in Britain’s largest retailer were plagued by profit warnings and a black hole in the accounts. The slump prompted Philip Clarke’s departure and investors have been betting on a return to form in 2015. However, since recovering a third of its value by April, Tesco’s share price has dropped from 251p to 210p.

Tesco’s annual general meeting is also scheduled for Friday, giving shareholders the chance to vent their frustrations.

Elsewhere, Debenhams’ third-quarter trading update on Thursday will show whether the department store group can keep up the good form after its half-year results impressed.

Bus-to-trains group Stagecoach is set to reveal its annual results on Wednesday, while there is a first-quarter trading update out tomorrow from embattled oil services group Petrofac.

Over on Aim, the payments group Eckoh is set to unveil its annual results on Thursday.

On the economic front, all eyes will be on the emergency summit of eurozone leaders to discuss the Greek debt saga.

Tuesday sees China release its manufacturing data for June, so keep an eye on how mining stocks respond. Signs that growth from the world’s fastest-growing superpower is on the wane will affect industrial metals stocks, while a robust PMI number will buoy the sector.