Companies Reporting: Dunelm, Fevertree, Trainline

Our regular look at the FTSE 350 and other companies reporting from 09 – 13 September.

• Dunelm faces an uphill battle
• Can Fevertree keep full-year guidance on track?
• There’s no room for complacency at Trainline

Dunelm, Full Year Results, Wednesday 11 September

Susannah Streeter, head of money and markets, Hargreaves Lansdown: Investors will want to find out how Dunelm LON:DNLM is faring in a challenging market. The latest snapshot from the British Retail Consortium for August showed that spending on big-ticket items including furniture, household appliances and other homewares continued to decline as households kept a tight rein on budgets. The company has already warned this year about volatile trading patterns, and it looks likely there may be more ups and downs to come.

Although the consumer bellwether reported that sales rose 3% in the third quarter, this was led by volume growth thanks to the expansion of its store estate and increased ranges. While this suggests consumers are still prepared to part ways with their cash on homewares, the market remains difficult. Dunelm is one of the strongest names in the sector, and the nimblest, but this corner of retail is still facing an uphill battle for now.

Customers have been prioritising spending on holidays and putting off buying new sofas. However, its mix of cheaper homewares, and soft furnishings may help it weather further storms, with customers still keen to spruce up their living spaces on a budget.

Fevertree, Half Year Results, Thursday 12 September

Aarin Chiekrie, equity analyst, Hargreaves Lansdown: Last investors heard, Fevertree LON:FEVR had been scooping up market share across its regions which had helped to increase sales. Innovation across Rum, Vodka and other spirits has helped boost the group’s leading position in the UK, and growth in Europe continues to grow ahead of the broader mixer category.

Fevertree’s already said it’s comfortable with full-year expectations, which at the time of the last update in June pointed towards 8% sales growth and underlying cash profit margins of around 15%. Markets will be keeping a close eye on whether these targets are still on track when half-year results are announced next week, with market forecasts currently suggesting this could be a slight stretch.

Trainline, Half Year Trading Statement, Thursday 12 September

Susannah Streeter: Investors want to see if strong demand for e-tickets in Europe is continuing for Trainline LON:TRN, and whether a buoyant summer for travel translates into higher sales. For the full year, growth was the fastest for Spanish domestic travel, as greater competition in the rail market resulted in travellers shopping for the best priced routes. There will also be interest in the outlook for the UK given agreements reached aimed at ending ongoing rail strikes. Although the proposal by the new government to launch a new centralised rail body, called Great British Railways, has caused some nervousness, crucially for Trainline, there appear no plans to revive the Conservative administration’s former plan for a new national ticket app and website.

So, even though nationalisation plans still appear to be on track, they are unlikely to upset Trainline’s high margin operating model any time soon. Trainline is set to continue to benefit from the shift to digital tickets, with the app now offering popular and cheaper split ticket options. For now, customers seem willing to pay the extra surcharge to buy via its app or online, in return for the high level of flexibility and service the company offers. Keeping ahead on the tech front to leverage data to improve the customer experience will require continual investment and this won’t come cheap. Trainline will also be mindful of rivals, like Seatfrog and Rail Online, who are angling to leap into its market share, so there is no room for complacency.

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