High Street results come under microscope
The City is set to have its eyes on the high street as a host of retailers, including Tesco, Debenhams and GUS, are set to report their figures.
Tesco is expected to smash through the £1 billion barrier when it reports its full-year profits on Tuesday. Sales have been boosted by food price inflation and a less aggressive pricing environment in general, while the group is also likely to have increased its share of the non-food market.
A strong Christmas trading statement has convinced the City that department store chain Debenhams will produce a strong set of interim results on Tuesday.
The group showed sales over the first 20 weeks increased by close to 11% and both a brand awareness advertising campaign and the addition of four new stores should help to bolster this growth.
Gross margin is expected to remain stable, while costs are likely to have increased in-line with the increased store portfolio. Analysts predict interim pre-profits of £78.2 million, up from £73.8 million.
Chip designer Arm Holdings reports its first quarter results on Wednesday. It has been caught up in the recent dip among tech stocks and will need to provide a solid outlook statement and evidence that demand for its products and services remains strong. Stockbroker Gerrard forecasts first quarter profits of £11.5 million, compared to £8.2 million.
Burberry may be all the fashion, but there are concerns its growth could be slowing, particularly in its traditional safe haven of the Far East. Its parent Great Universal Stores (GUS) will have to allay these fears when it makes a fourth-quarter trading statement on Wednesday.
The City will also be keen to hear if its US business Experian, which accounts for 25% of group profit, has been affected by the US slowdown, particularly after a profit warning from competitor Acxion last week. Analysts expect a full-year pre-tax profit of £465 million against £379.6 million last time.
Sports retailer JJB Sports is likely to show off a finely honed business on Wednesday, with full-year pre-tax profits forecast to come in at £80.3 million, an increase of near to £10 million on last year. The group has closed its high-street outlets to focus on growth out-of-town and the policy is expected to have paid off handsomely with a strong jump in sales.
A mixed performance is forecast for newsagent WH Smith on Thursday, when it reports its first-half figures.
Figures for the first 20 weeks showed good sales growth of 6% in the retail division but the performance in news distribution was hit by a slowdown in magazine sales. Gerrard predicts interim pre-tax profits of £102 million, compared to £101 million for the year before.
