Companies Reporting: Pets at Home, Kingfisher, NVIDIA, Salesforce

The diary of FTSE 350 and other companies reporting from 26 – 30 May.

• Growing expectations for Salesforce’s AI platform amid slowing growth
• Warm weather boosts sales for Kingfisher
• Pets at Home’s margins are under pressure as demand wanes and costs rise
• Chinese restrictions to hit NVIDIA’s first quarter, underlying demand still strong

Salesforce, Q1 Results, Wednesday 28 May

Aarin Chiekrie, equity analyst, Hargreaves Lansdown: Salesforce NYSE:CRM is set to report its Q1 results next week, following a year of modest revenue growth. Having spent the past year or two rightsizing the business, costs are in a much better place, and both profits and cash flows are feeling the benefits. While this was a necessary step, the focus now shifts back to driving top-line growth.

• Company Diary: Salesforce
• Companies Reporting: Ashtead, M&G, Salesforce

Group guidance for first-quarter revenue growth of 6-7% was softer than markets were hoping for at the time. This reflects a tricky macroenvironment where businesses are still being selective of their software spending. Missing this target range next week would likely weigh heavily on investor sentiment.

Investors were excited to hear Salesforce’s AI platform, Agentforce, gained early momentum late last year with over 3,000 paid AI deals. But with around 150,000 customers, these deals aren’t dial movers just yet. Some analysts think it’s just a matter of time, and markets are keen to hear whether the positive momentum has continued into the new year.

Kingfisher, Q1 Trading Statement, Wednesday 28 May

Susannah Streeter, head of money and markets, Hargreaves Lansdown: With the unusually warm Spring weather sending homeowners into a craze of refreshing homes and gardens, it bodes better, in the short term, for B&Q owner Kingfisher LON:KGF. In April, DIY sales saw a significant increase, with consumer spending boosted for outdoor related products, in particular. Also, a surge in property completions due to the end of the stamp duty holiday is likely to have led to higher sales of products used in renovations. The problem is that the expected uplift could just be a flash in the pan for Kingfisher, rather than the start of a more sustained increase in sales. The last financial year proved highly difficult, with a 35% fall in annual pre-tax profit, with bigger ticket items particularly harder to shift.

• UK Stock Market News: Next, easyJet, Kingfisher
• UK Stock Market News: Smiths, Kingfisher, Serco

Although there is more strength in its digital operations and trade business in the UK, other markets are problematic. In France, consumer confidence has fallen to a three-month low, which won’t help efforts to turn around its struggling Castorama chain. With some fears about the economic outlook lifting, investors will be hoping Kingfisher might be able to unveil an improved outlook for the rest of the year for the group, but the signs right now are not super-positive.

Pets at Home, Q4 Results, Wednesday 28 May

Derren Nathan, head of equity analysis, Hargreaves Lansdown: Pets at Home LON:PETS is set to deliver underlying profit before tax of around £133mn when it releases its full-year results next week, broadly in-line with the previous year’s performance. Its vet division has been caught up in an industry-wide probe by the UK’s Competition & Markets Authority (CMA). The CMA’s initial proposals don’t look too taxing, but investors will be keen to hear any thoughts from the company.

• UK Stock Market News: Speedy Hire, Pets at Home, Energean
• Can Pets At Home find its competitive edge as pet ownership slows?

But it’s the retail division where the pressure on demand has been most noticeable. Add in higher wages and employers’ national insurance contributions, and analysts are understandably pencilling in reduced profitability for the new financial year at group level. As a result, investors will be paying particular attention to the outlook and the steps Pets at Home is taking to help offset these rising costs.

Nvidia, Q1 Results, Wednesday 28 May

Derren Nathan: NVIDIA NASDAQ:NVDA expects to report first-quarter sales of about $43bn next week, reflecting year-on-year growth of 65%. Donald Trump’s ‘Liberation Day’ announcement, as well as fresh US trade restrictions against its H20 chip, designed specifically for the Chinese market, came in towards the end of the quarter. As a result, the company has stated it will see a $5.5bn write-down on the value of its H20 inventory in these results.

• NVIDIA earnings: blowout results calm AI bubble market fears
• NVIDIA’s earnings and the limits of sky-high expectations

In light of these developments, analysts have also been trimming their sales forecasts, with second-quarter expectations falling from nearly $48bn to $46.3bn since the news broke. But earnings season readouts from customers Amazon NASDAQ:AMZN, Alphabet NASDAQ:GOOGL, Microsoft [NasdaqGS:MSFT] and Meta NASDAQ:META showed no sign of a dip in underlying demand for Artificial Intelligence infrastructure built on NVIDIA’s technology. So, there could be room for some upside to these numbers.

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