Tesco and M&S to report festive figures in busy week for retail
RETAIL HEAVYWEIGHTS Tesco and Marks & Spencer will hit the corporate reporting dance floor next week as they become the latest high street firms to shine a light on Christmas trading.
City analysts expect M&S to post a disappointing set of thirdquarter figures, with house broker Shore Capital saying that it cannot rule out a downgrade to its profit forecasts.
It is also predicting like-forlike sales will fall up to 3 per cent at clothing and home, which includes M&S’s troubled womenswear division.
In food, Shore is also pencilling in a 3 per cent decline in comparable sales in the three months to the end of December following a weak October and November for the UK grocery sector as a whole.
The figures, out on Thursday, will come at a time of severe upheaval at the chain.
M&S recently drafted in former Sainsbury’s boss Justin King to join the board as a nonexecutive as the high street firm undergoes the next phase of a
Former Sainsbury’s boss has joined the board of Marks & Spencer.
drastic transformation plan under boss Steve Rowe.
Under the programme, spearheaded by Mr Rowe and chairman Archie Norman, M&S is seeking to save costs through store closures, streamlining its corporate structure and ramping up digital operations.
Conversely, Tesco is set to emerge a festive winner, with analysts at Barclays forecasting a 1.3 per cent rise in UK like-for-like sales in the six weeks to January 5.
The bank’s retail analyst James Anstead said: “As with Morrisons and Sainsbury’s, we think Tesco should benefit over the Christmas period from the lack of weather disruption (which hit in mid December 2017) and the presence of an additional ‘full day’ of shopping.
“Tesco may also have a benefit from the fact that last year’s Christmas saw an impact ... as a result of the disruption from Palmer & Harvey’s collapse.”
However, Barclays also predicts that, for the third quarter as a whole, Tesco will see comparable sales growth slip to 0.8 per cent from 2.5 per cent in the previous three months.
James Grzinic, analyst at Jefferies, pointed to intensified Brexit fears and weather woes, which hit consumer spending during Tesco’s reporting period.
“Brexit and weather have been incremental challenges since November. The political mayhem was critical in driving a disconnect between a supportive macro context and an increasing reluctance to spend.”