RETAIL is in the market spotlight this week, ranging from industry bellwether Marks & Spencer and Morrisons supermarket group to cut-price fashion business, Primark.
M&S’s recent non-food sales performance, the worst for more than three years, has turned the screw on chief executive Marc Bolland ahead of half-year results tomorrow.
The UK’s biggest fashion retailer posted a 6.8 per cent fall in non-food like-for-like sales in the 13 weeks to 30 June after losing market share in its key womenswear sector.
The setback saw head of general merchandise Kate Bostock ousted, to be replaced by former Debenhams and Jaegar boss Belinda Earl, who has been told to revitalise womenswear in the role of style director.
M&S blamed the earlier sales fall on wet weather and a shortage of popular lines. Most retail experts expect a better second quarter thanks to improved market conditions, pencilling in a decline of 2.5 per cent for general merchandise and 1.5 per cent gain in food sales. But the consensus is for M&S’s first-half pre-tax profits to drop 11 per cent to £280 million.
Supermarket Morrisons’s third-quarter trading update on Thursday is set to show pressure on sales from rivals’ money-off coupons.
The chain saw interim profits drop £9m to £440m after underlying sales fell 0.9 per cent in the first half of the year. Seymour Pierce forecasts yearly profits to fall to £910m from £935m a year earlier.
Fashion firm Burberry reports interim figures on Wednesday. It warned over profits in September amid concerns of falling Chinese demand for its luxury goods.
Burberry lost 20 per cent of its stock market value the day after the warning, but the business has since recovered, posting a more robust trading update a month later.
Analysts are expecting interim pre-tax profits to edge up to £168m from £162m. Annual results from Associated British Foods tomorrow come after another stellar year for its budget fashion chain Primark.
The financial impact of flight disruption due to superstorm Sandy may be revealed when British Airways parent company International Airlines Group (IAG) updates on trading on Friday. Investec Securities is forecasting a €227m (£182m) underlying profit in the third quarter – down 37 per cent.