A BIG week for retail sees results from department store chain John Lewis, B&Q parent Kingfisher, chocolatier Thorntons and clothing giant Next.
Next is expected to report robust profit growth in its half-year results on Thursday, as new stores and strong online sales continue to boost the high street giant.
Broker Numis is forecasting a 7 per cent increase in pre-tax profits for the high street fashion chain, to £244 million.
Analyst Matthew Taylor said: “There may have been some benefit from Next’s position as official clothing supplier to London 2012, with Team GB items prominently displayed in stores the main source of the trading uptick.”
Shares in Home Retail Group have jumped 30 per cent since a surprise update showed better-than-expected trading at catalogue business Argos. Underlying sales declined by 0.2 per cent in the three months to 2 June, which marked a significant improvement on the 8.7 per cent drop in the previous six months, helped by the launch of Apple’s iPad 3 tablet computer.
The City expects sales figures for its second quarter to provide further cheer on Thursday, with analysts pencilling in a 0.7 per cent fall, which would be much better than the 9.6 per cent drop seen a year ago. The chain, which has about 750 stores, is looking to recover from months of dire trading which prompted Home Retail to axe its dividend pay-out.
Investec analyst David Jeary said: “We believe that fears on Argos should be alleviated, if not fully allayed, by consecutive quarters of broadly flat like-for-like sales performance.”
Another improved performance would also reduce some of the pressure on the chain to close stores amid a review being carried out by strategy consultants OC&C to help new managing director John Walden assess the Argos business.
While the outlook may look slightly rosier for Argos, Home Retail’s DIY chain Homebase is set to have experienced more tough trading due to the slow housing market, which is also affecting rival B&Q.
B&Q’s parent company, Kingfisher, reveals its half-year results on Wednesday, and is expected to show profits coming under pressure after a wet April to June period dampened demand from gardeners.
Kingfisher has previously warned it was forced to slash its prices on plants and ramp up marketing activity on indoor projects, which hit profit margins.
Department store chain John Lewis Partnership will reveal strong profit growth in its first-half results on Thursday as warmer weather and an Olympic boost helped sales.
The employee-owned group, which also includes supermarket Waitrose, is forecast to report a 21 per cent rise in pre-tax profits to £109.4m in the six months to 30 July.
Meanwhile, chocolatier Thorntons will be hoping that a strong performance from its “Best of British” range will give its annual results a lift after a tough year.
The group previously warned it will roughly break even in the year to June, compared with £4.3m profit in the previous year. A poor Christmas, rising raw material costs and a generally weak consumer environment have seen the retailer struggle for most of the year.