JD has tapped into the booming market for ‘athleisurewear’ – where people wear jogging bottoms and tracksuits casually rather than for sports – which has insulated it from some of the challenges faced by other bricks-and-mortar retailers.
Its expansion into the US with the £400mln acquisition of Finish Line has also helped and is the main reason why the City is expecting a big jump in sales and profits in the opening six months of 2019.
Shore Capital is forecasting a 41% rise in first-half revenue to £2.6bn, while underlying earnings are pencilled in at £158mln – 28% higher than what JD recorded in the same period last year.
“We look for an update on the international plans of the company, together with the trading performance of the US stores, in particular the six stores that have been converted from Finish Line to the JD fascia. We also look for an update on the on-going CMA inquiry into Footasylum,” said Shore Cap in a note to clients.
Slowdown worries hover over Ashtead
However, with recent trends showing shrinking US construction spending likely to impact the utilisation of the company’s fleet, margins could come under pressure and also knock pricing.
The firm’s UK business is also unlikely to provide any bright spots will Brexit uncertainty continuing to weigh on building activity.
With this in mind, investors will likely be looking for any signs that revenues and margins are starting to struggle, as more stress will add pressure to a balance sheet that already sees net debt rising to the upper end of its target range.
Savings and satisfaction key for Bovis
A half year trading statement showed sales rates and completions were going in the right direction for Bovis Homes Group PLC (LON:BVS), while a trend towards lucrative locations is underpinning selling prices.
However, investors will likely expect more progress when the group reports its interims on Tuesday, with more cost savings and higher-margin land purchases eyed as the key drivers.
Customer satisfaction ratings will also be in focus after the firm faced a public backlash in 2017 and 2018 over the quality of some of its houses, although recently it seems to have got its act together with scores moving towards a five-star rating.
“Focus will likely be on an update in trading environment in H2 and progress towards mid-term targets,” UBS said.
The latest guidance from Bovis was for 4,000 completions per year in the mid-term, with at least 23.5% of gross margin.
888 numbers in focus
The group said “strong momentum” had continued in its global markets, with revenue growth in its Sport and Casino arms of 29% and 13%, plus 18% growth for its UK market as the Casino business is transformed to a mass-market proposition from the previous reliance on VIPs.
This offset a flat performance in Bingo and a 28% decline in the Poker division.
Bosses were “very encouraged” by the 20% increase in first time depositors in the period, a “key indicator” of its growth prospects.
More positivity eyed from unemployment figures
Aside from the deluge of company news, Tuesday will also bring the UK’s latest batch of unemployment figures.
The better-than-expected GDP data for the three months to July on Monday, which showed the UK economy had stayed flat as opposed to forecasts of a 0.1% drop, will give traders hope that jobs figures can also beat the odds and provide more positive catalysts for the pound.
In the three months to the end of June, UK employers added 115,000 jobs despite Brexit uncertainty.
RBC Capital Markets said it expects employment growth to “remain positive” in the three months to the end of July and the unemployment rate to stay at 3.9%.
“However, the key focus will be on wages,” it said, expecting pay growth excluding bonuses slipping back a little this month, “but that shouldn’t detract too much from the bigger picture, which is that pay growth remains firm overall”.
RBC added: “In addition, that pay growth supporting domestically generated inflation is the main reason that the MPC can remain on hold as it awaits clarity on Brexit.”
Significant announcements for Tuesday September 10:
Finals: Litigation Capital Management Ltd (LON:LIT)
Interims: 888 Holdings PLC (LON:888), Anexo Group Plc (LON:ANX), Ashtead Group PLC (LON:AHT), Bovis Homes Group PLC (LON:BVS), Cairn Energy PLC (LON:CNE), Concurrent Technologies PLC (LON:CNE), Ekf Diagnostics Holding PLC (LON:EKF), Good Energy Group Plc (LON:GOOD), Gulf Keystone Petroleum Ltd (LON:GOOD), Harworth Group PLC (LON:HWG), Hilton Foods Group PLC (LON:HFG), IP Group Plc (LON:IPO), JD Sports Fashion PLC (LON:JD.), Midwich Group Plc (LON:MIDW), Nucleus Financial Group PLC (LON:NUC), Petropavlovsk PLC (LON:POG), Regional REIT Ltd (LON:RGL), Sanne Group PLC (LON:SNN), Team17 Group PLC (LON:TM17), SimplyBiz Group PLC (LON:SBIZ), TP Group PLC (LON:TPG), Trinity Exploration & Production PLC (LON:TRIN), Vectura Group PLC (LON:VEC)
Economic data: UK unemployment and average earnings