Companies Reporting: Carnival, Greggs, Tesco, Wetherspoon

Our regular look at the FTSE 350 and other companies reporting from 30 September – 04 October.

• Carnival expected to cruise ahead in the second half of the year
• Greggs has set itself a high bar, can it deliver?
• A watch on whether Tesco’s value offering can keep a lid on growth
• Sharp rise in profits expected for JD Wetherspoon

Carnival, Q3 Results, Monday 30 September

Susannah Streeter, head of money and markets, Hargreaves Lansdown: Investors will be keen to find out if Carnival is cruising ahead with a similarly encouraging performance in the second half of the year. All the signs are pointing that way. The second quarter saw record results, with revenue increasing 18% helped by higher ticket sales and an uplift in onboard spending. Consumers still seem to be ring-fencing available budgets to splash out on holidays, with pent-up post pandemic demand continuing to play out.

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Big questions still remain about how long this appetite to cruise will remain unsated. Much is likely to depend on the economic climate on both sides of the Atlantic. There are more signs of consumer caution, although so far that’s showing up in lower demand for more expensive goods, rather than holidays. But the cruise business can be fickle. Core customers may be more insulated in terms of wealth demographics, as spending appears to be holding up amongst older generations. However, they may well turn more cautious about travelling if conflicts increase around the world.

Carnival’s balance sheet is still feeling the after-effects of Covid, with net debt higher than the company’s total market value. Although the cash-generation outlook is encouraging, this is still a mountain of borrowing to deal with, so expectation is high on management to keep delivering robust revenue growth and strong cashflows.

Greggs, Q3 Trading Statement, Tuesday 1 October

Matt Britzman, senior equity analyst, Hargreaves Lansdown: Greggs has set a high bar over the past year or so and continues to impress. July’s half-year results once again beat expectations despite the backdrop of poor weather and consumer uncertainty. Attention now turns to next week’s third-quarter trading update, where investors expect to see continued strength.

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Credit where it’s due, management has been on point with execution. Menu tweaks, a focus on the evening market, new delivery options, and a push for penetration on the app have all worked together to deliver outperformance. There’ll likely be a slowdown in like-for-like sales growth over the second half as Greggs laps tougher comparable periods from last year. But with the store estate expanding and plenty of growth drivers, the outlook remains positive.

Tesco, Half Year Results, Thursday 3 Oct

Aarin Chiekrie, equity analyst, Hargreaves Lansdown: Tesco’s sales rose 7.2% to £61.5bn last year, ignoring currency impacts. This came up short of market expectations largely due to lower prices at the pump. In Retail, Tesco finished the year on a high as growing market share meant that customers took more items off the shelves, offsetting the lower goods price growth.

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The Finest range is helping Tesco poach customers off more premium supermarkets. At the other end of the spectrum, the group has invested in keeping prices low in its value range to help fend off competition from the likes of Aldi and Lidl. That’s expected to keep a lid on revenue growth in next week’s half-year results, with markets only expecting the top line to move 1.7% higher to around £34.7bn.

JD Wetherspoon, Full Year Results, Friday 4 October

Derren Nathan, head of equity research, Hargreaves Lansdown: JD Wetherspoon has seen expectations for its full-year earnings rise over the last nine months. In next week’s results, markets aren’t expecting too much difference from consensus which is now looking for revenue of £2.0bn. Pre-tax profits are expected to rise to £72.0mn too, which would mark an uplift of 69% on the prior year. The market’s not predicting a return to dividend payments till 2027, but investors will be looking for any clues as to whether that may be on the cards any sooner.

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They’ll also be providing an update as to how trading at the group’s sites has started in the current year. Warmer weather in August should have provided something of a tailwind, but the rioting and looting that briefly plagued UK high streets in early August, could have deterred some pubgoers from venturing out.

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