We give our thoughts on what to expect from companies announcing results week commencing 6 January 2020.
Companies reporting w/c 6 January
Wm Morrison Supermarkets Plc (December 2019 Sales and Revenue Release)
Despite the fact 2019 was a good year for the stock market, Morrisons ends up being one of a handful of companies in the top 100 to fall over the year, as it has continued to lose market share and the most in the last quarter among the stablished names according to Kantar Research. So the update at the beginning of the year, covering the crucial holiday period trading activity, is all-important for the fourth largest retailer whose financial year ends in January. Consensus estimates are that sales are likely to be roughly flat but the group should make some headway on profits as cost cutting has been a feature.
We currently list Wm Morrison as a HOLD
J Sainsbury Plc (Q3 2020 Sales and Revenue Release)
Sainsburys is another one of the handful of stocks to end the year down when the rest of the market has done well, reflecting the fact sales were falling when measured at the half year stage. But investors should take some hope from the fact that the pace of the falls seems to be slowing. This update includes the crucial holiday period and the focus to a certain extent will fall on its general merchandise division Argos, where sales are likely to reflect the difficult conditions in the general retail environment but will we see a bounce in spending after the apparent "dither" was removed by the election result?
We currently list J Sainsbury as a HOLD
Tesco (Q3 Trading Statement)
The UK’s largest supermarket group has benefitted from a significant amount of restructuring in recent years under the soon-to-depart CEO Dave Lewis, and the shares have responded positively. The acquisition of wholesale group Booker also provided a boost and if the sale of the Asian businesses, announced in December, goes ahead the company will have further financial firepower with which to fight off the challenge of discount groups Aldi and Lidl. Any update on that potential sale, which could yield over £6bn, will certainly be of interest to investors as it may also lead to a special dividend.
We currently list Tesco as a HOLD
Other companies reporting on this day include: Marks & Spencer (Q3 trading update) – we currently do not have a view on this stock
JD Sports Fashion Plc (December 2019 Sales and Revenue Release)
JD Sports Fashion has defied the general malaise in high street retailing in recent times. That was demonstrated again at the interim stage in September when its results beat market expectations with a 10% increase in like-for-like sales in the UK and a 7% rise in pre-tax profits. There are reports the company executed a good strategy for Black Friday so expectations have been raised for another good set of figures in this Christmas update. The shares were hit temporarily in December when the majority share owner, the Pentland Group, sold a significant number of shares, but they quickly recovered.
We currently list JD Sports as a HOLD
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