Can retail stalwart Marks & Spencer maintain its positive momentum?

High street fashion-to-foods seller's results provide investors with their next chance to check on the health of the UK consumer

Forthcoming results (24 May) for the year ended 2 April 2023 from Marks & Spencer (MKS) will give investors another opportunity to take the temperature of the UK consumer, with upbeat guidance probably required to sustain the FTSE 250 retailer’s positive share price momentum.

In January’s third quarter trading statement, Marks & Spencer flagged robust trading momentum, though management prudently chose to retain guidance given cost headwinds and the inflationary pressures facing shoppers. Investors keenly await an update on trading in the opening weeks of the new financial year to see how Marks & Spencer has coped with recent wet weather and the ongoing cost-of-living squeeze.

Other talking points will include the performance of the Ocado Retail joint venture, online and overseas growth rates and the showing of third party brands including Jaeger.

Having strengthened its balance sheet and liquidity position, income-hungry investors will be watching to see if Marks & Spencer returns to the dividend list by declaring a payout for full year 2023. Now led by CEO Stuart Machin, the high street stalwart has rediscovered its mojo, is taking share in both its clothing and home and food businesses and is even opening new stores it says are ‘core’ to its aim of becoming the UK’s leading omnichannel retailer. [JC]

Can Deere keep pushing up prices or will agricultural demand dive?

Industrial bellwether beat forecasts and raised the bar last time around

Despite recession concerns, the world’s largest agricultural equipment maker Deere & Co (DE:NYSE) posted one of the first quarter’s standout industrial reports and raised its full-year outlook.

We suspect Deere will do well to beat and raise forecasts again this time, although that is probably what it will take for the shares to revisit their recent highs around $440.

Demand from the farming industry has stayed strong as higher commodity prices last year have helped producers to buy new equipment or upgrade their fleets, which means Deere has been able
to raise prices without impacting sales volumes.

Revenue for the three months to the end of January was up 32% to $12.65 billion, while higher margins meant earnings per share (EPS)
were up a whopping 124% at $6.55 almost 20% ahead of the consensus forecast of $5.53 per share.

As a result, the firm raised its forecast for net income for the year to October from between $8 billion and $8.5 billion to between $8.75 billion and $9.25 billion, an increase of between 23% and 30% on last year.

Analysts in turn lifted their estimates for earnings per share for the full year from $28 to $30.60, an increase of 30% on the previous year.

In the quarter to April last year, the firm reported revenue of $13.4 billion and EPS of $6.10, and analysts have pencilled in sales of $14.8 billion and EPS of $8.50 for the latest quarter to the end of April. [IC]

UK UPDATES OVER THE NEXT 7 DAYS

FULL-YEAR RESULTS

May 22: Kainos, Big Yellow

May 23: Helical, Assura, Cranswick, Calnex Solutions, Engage XR Holdings, RS, Bytes Technology

May 24: SSE, Great Portland Estates, C&C (CDI), Severn Trent, Marks & Spencer

May 25: Workspace, Renewi, QinetiQ , Pets at Home, United Utilities, Griffin Mining, Intermediate Capital

INTERIMS

May 23: Benchmark Holdings, Victorian Plumbing, Avon Protection

TRADING UPDATES

May 23: Benchmark Holdings, Seraphim Space Investment Trust

May 24: Aviva, Intertek, Close Brothers

May 25: Kingfisher, Johnson Matthey

US UPDATES OVER THE NEXT 7 DAYS

QUARTERLY RESULTS

May 19: Deere & Co, Foot Locker

May 22: Advance Auto Parts, Capital Southwest

May 23: Lowe’s, Intuit, Palo Alto Networks, Zoom Video, Urban Outfitters, Nordstrom

May 24: Bank of Montreal, Bank of
Nova Scotia

May 25: RBC, Medtronic, Workday, Autodesk, Ralph Lauren, Tiger Brands

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