Companies Reporting: Carnival, AG Barr, Ocado, Next

Our regular look at the FTSE 350 and a selection of other companies reporting from 27 – 31 March 2023

• Is the party over for Carnival?
• AG Barr will show if they can keep a lid on inflated costs
• How will Ocado fair against discounters during cost-of-living squeeze?
• Will Next fall out of fashion with consumers?
• Moonpig needs to show some growth in tough times

Carnival plc, Q1 results, Monday 27 March

Derren Nathan, head of equity research “Earlier this month Carnival [LON:CCL] announced it had arranged a $2.1bn debt facility. But when it comes to the world’s largest cruise company’s debt pile, that is just the tip of the iceberg. It would be good to see some evidence in next week’s Q1 update that the recent uptick in passengers is resulting in profitability and cash flows. And that’s not going to be plain sailing. Occupancy, although it’s been going in the right direction, has been below pre-pandemic levels. All the while, Carnival’s also been navigating the headwinds of higher advertising costs, fuel inflation and adverse currency movements.

The cost base and debt pile add extra pressure to sell more cruises. There are signs that demand is holding up well for now. Carnival recently disclosed that one part of its fleet, P&O cruises, has enjoyed a record performance in its peak booking period. It will be interesting to see if the rest of Carnival’s brands are on the right tack. But with the cost-of-living crisis still biting hard, the pressure on discretionary spending continues to mount.”

AG Barr, Full year results, Tuesday 28 March

Aarin Chiekrie, equity analyst “Latest figures showed AG Barr LON:BAG revenues are expected to climb roughly 15% on a like-for-like basis, reaching around £315m for the year. The group’s hoping cost-cutting measures and price hikes can keep a lid on those inflated costs. This should help to deliver a solid profit performance next week, with many analysts forecasting a pre-tax profit of almost £43m.

Barr’s been pursuing non-organic growth opportunities as part of its growth strategy. These have been focused on the faster-growing areas of the industry, like oat milk producer MOMA, and more recently, the energy drink brand Boost. While these acquisitions should help growth in the long term, they’re likely to weigh on margins initially. And there are plenty of other headwinds to face, including revenues that come almost exclusively from the UK region. While revenues have been robust so far, this lack of diversification is a big risk. There will be a close eye on whether there are any early signs of weakening demand in the region.”

Ocado, Q1 trading statement, Tuesday 28 March

Susannah Streeter, head of money and markets “Ocado Retail has been struggling to compete in the current bargain hunting environment as shoppers battle with cost-of-living headwinds.  Investors will be anxious to find out if its fortunes show any sign of turning a corner after losses ballooned for the year to 27 November. With food prices in the supermarket rising yet again to an incredible 18.3% in February, Ocado is likely to be weighed down as discounters continue to be a formidable force to be reckoned with.

Early indications suggest that Ocado LON:OCDO could have been blessed with a surge of sales around Valentine’s Day as shoppers splashed out on lucrative dinners, including steak and sparkling wine flourished. This may just be a flash in the plan, particularly as other supermarkets are upping their game with it comes to their retail offering. Online shopping has at a permanently higher base post-pandemic, which bodes well but investors are anxious for signs of more scores on the doors and want to see more partners being brought on board.’’

Next, full year results, Wednesday 29 March

Aarin Chiekrie, equity analyst “Next’s last trading update gave the group plenty to cheer about. Sales over the Christmas period were better than expected. In the nine weeks to 30 December, full-price sales were up 4.8% on last year, with retail sales driving most of the uplift. This impressive festive trading led the group to upgrade its full-year profit guidance by 4.5%, now expected to come in at £860m when the group reports next week.

While these numbers are commendable, given the challenging environment for retailers, it’s important not to lose sight of the challenges ahead. To cope with rising costs, Next LON:NXT is raising prices. With the group set to pass on 6-8% cost inflation, there is a question mark over whether consumers can stomach these hikes. If not, we could see sales drop. The group’s position as a middle-of-the-road retailer means its customers could slide down the value chain rather than fork over a little more.”

Moonpig Group, trading statement, Thursday 30 March

Susannah Streeter, head of money and markets
“Moonpig LON:MOON flew out of FTSE 250 as the last reshuffle, relegated to the FTSE Small Cap after it was lashed by multiple headwinds. Consumers have been shifting their buying behaviour amid the cost-of-living crisis, buying fewer lucrative add-ons to card purchases and with inflation heading up again in February, this tougher environment may be here to stay for some time. There is also uncertainty about how long the threat of fresh Royal Mail strikes will linger, as walk-outs hit hard around Christmas and customers shied away from buying premium cards if delivery could not be guaranteed.  Moonpig’s wings have been clipped and investors will need to see signs of meaningful growth returning before they feel reassured.”

This article has been brought to you in association with Hargreaves Lansdown. All opinions expressed in this article are from the analysts and do not necessarily represent the opinions of The Armchair Trader.

FTSE 100, FTSE 250 and selected other companies scheduled to report