Like the rest of the supermarket sector, Tesco’s first quarter sales last year were boosted by the wedding of Prince Harry and Meghan Markle, plus unusually warm weather and the FA Cup final.
Industry data from Kantar Worldpanel showed UK grocers’ sales fell 0.4% in the four weeks to May 19.
“Quarterly UK retail sales growth excluding fuel has a 79% correlation to Kantar data, and while Kantar and Tesco's periods do not perfectly overlap, Kantar suggests that Tesco will report +0.2% retail growth for the first quarter of 2020, close to our expectations,” Deutsche Bank said in a preview.
They added: “We expect the group to report 0.4% sales growth excluding fuel, with 0.7% like-for-like growth ex fuel.”
In the first quarter of fiscal year 2019, Tesco’s sales, excluding fuel, jumped 12.1% with like-for-like growth of 1.8%.
Box prices key driver for DS Smith numbers
DS Smith PLC (LON:SMDS), the FTSE 100-listed corrugated cardboard packaging maker, will unbox its annual numbers on Tuesday, with its shares down by more than a quarter since its last final results.
The most recent updated from the group was an April update that confirmed trading remained in-line with management’s expectations in the second half of the year ending that month.
All regions provided growth though softer volume were evident in export-led markets such as Germany, analysts at broker Numis noted, and they “believe an update on current demand conditions will be a key influence on investor sentiment”.
The broker, which forecasts revenues of £6.243bn, adjusted pre-tax profit of £556mln and £2.2bn of net debt, believes the near-term direction of box prices “will be the key driver of ours and consensus earnings estimates, and share price direction, following the release of results”.
In a recent note, analysts at UBS highlighted falling input prices but felt selling prices of corrugated packaging will be “relatively resilient” and only decline around 2% this year and next.
The Swiss bank told clients that following the acquisition of €1.9bn Europac last summer, DS Smith was likely to “take a pause in its acquisitive growth strategy, but longer term continue to consolidate the market”.
PZ Cussons looks to avoid slippage
Imperial Leather soap maker PZ Cussons PLC (LON:PZC) won’t be expected to slip up when it issues a trading update on Thursday.
A very brief trading update in April said the FTSE 250-listed group’s profit expectations remained in line with previous guidance, although that guidance constituted a profit warning when it was delivered in January so investors will be hoping for no more downward movement in the forecasts.
Numis’ analysts expect Cusson’s latest update to follow a similarly brief pattern, with much more detail on the group’s ongoing restructuring likely to appear with its results in July.
Thursday June 13:
Economic data: US weekly jobless claims