What's in store today...
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The retail sector remains very much at the forefront of the corporate calendar today. Just 24 hours after high street giant Next (NXT) unveiled positive results, Kingfisher (KGF) steps into the lion's den with its interim results, following what proved a solid first half for the group thanks to a strong performance from France.
The company, best known in the UK for its B&Q chain, is likely to continue its earnings growth, with a small rise in EPS forecast.
"Despite tough comparatives in the UK in particular, Kingfisher saw gross margin move ahead in all markets as more direct sourcing and common product gradually came through. Looking ahead we see some forecast risk due to the dramatic slowdown in big-ticket retailing. However, we continue to like Kingfisher as a solid retail play, due to the combination of margin self-help, international expansion, market leadership and strong management," said Numis analyst Andrew Wade.
Next up is Kier (KIE), which turns the attention from the high street to the construction industry.
Analyst Howard Seymour at Numis believes focus will likely be on two features; one short term and one medium term. The short-term investors will be keeping an eye out for volume and margin outlook, as the public-sector cutbacks finally start to feed through.
Meanwhile, the medium-term strategy of the company is to refocus the group using surplus land assets and Seymour believes that the combination of the short-term resilience and medium-term growth potential are "relatively unique in the sector," and not reflected in the share price.
Rather aptly given the recent focus on the sector, the latest retail sales data makes an appearance, with volumes expected to have fallen by 0.2% month-on-month in August after rising 0.2% in July.
Howard Archer, chief UK and European economist at IHS Global Insight, notes: "The likelihood is that consumers will be very cautious in their spending over the coming months, which will limit overall growth prospects appreciably given that consumer spending accounts for some 65% of GDP.
"The only real good news for consumers at the moment is that it now looks likely that the Bank of England will hold off from raising interest rates for some considerable time to come."