Supermarkets to dominate this week
It’s off to the supermarket this week, with Tesco and J Sainsbury both due to give investors a taste of how the year is shaping up.
Tesco reports its interims tomorrow, which will include Tesco Personal Finance (TPF) as a consolidated entity for the first time. UBS expects the chain to indicate that it is making headway against its peers, as it continues to close the like-for-like deficit.
Charles Stanley forecasts pre-tax profit of £1.5m on sales of £28.6m. It expects like-for-like sales to have increased by four per cent, lower than that of its peers.
Sainsbury’s will follow up with a second-quarter trading update on Wednesday, and Numis expects it to continue to post an “impressive” like-for-like performance. But the broker still sees the shares as “too rich for us”, trading on over 14 times 2009 estimated earnings.
Sticking with groceries, Northern Foods will also give a trading update tomorrow. The food producer has benefited from the warm weather that has boosted sandwich and salad sales.
Michael Page will also update the market on Wednesday, reporting its third-quarter sales figures. UBS expects the organic revenue decline to have worsened again, to be around 54 per cent lower in the period.
Thursday will see fashion retailer Ted Baker report its interims. Investors will be watching to see if there are any improvements in its wholesale operation.
Carphone Warehouse and Rank Group will both give a trading statement on Thursday.
Halfords will issue its pre-close first-half trading statement, also on Thursday, and Citigroup have forecasted total sales growth of 0.2 per cent, with a 1.4 per cent drop in like-for-like sales. The broker said that, given the favourable shift in mix – with leisure strong and car maintenance weaker – first-half margins could be up by 150 basis points.
“With moderate competition, an innovative management team delivering service propositions and new technology drivers, it looks as if this chain will sustain high returns and cash flows,” it said.