Earnings season is all but over, but trading updates from key companies across the globe are providing insights into how certain markets are performing.
Investors this week will see updates from UK consumer-facing companies AO World and Currys, which will allow them to gauge how households have been coping with cost of living pressures.
In Europe, fashion retailer H&M is expected to come in above expectations, with analysts upgrading the stock ahead of the results.
Across the pond, Nike will try to convince investors it is on the right track, as analysts appear split on the direction of the athletic apparel’s stock in 2025.
Here's what to look out for:
AO World (AO.L) – Reports full-year results on Wednesday 26 June
White goods specialist AO World is expected to report around ￡10.4bn in revenues for the full year when it announces results next Wednesday.
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AO World has secured a 16% share in the major domestic appliance market, commanding nearly a third of the online segment.
In its last trading statement in March, CEO and founder John Roberts expressed cautious optimism. Despite anticipating a 9% drop in annual sales to around ￡1bn, marking the third consecutive annual decline, Roberts highlighted that pre-tax profit is expected to reach the upper end of the ￡28m to ￡33m range, an increase from ￡8m the previous year.
“Analysts will look to any guidance for the new fiscal year to March 2025, when they think sales will jump by 9% to ￡1.1bn and profits will advance again to ￡39m,” Russ Mould, investment director, Danni Hewson, head of financial analysis, and Dan Coatsworth, investment analyst, all of AJ Bell, wrote.
They added that AO World, which has not paid a dividend since its flotation in 2014, maintains a “healthy enough” balance sheet, bolstered by a ￡40m placing in 2022. Including leases, the company holds “modest” net liabilities of approximately ￡55m.
Nike (NKE) — Reports quarterly results on Thursday 27 June
The athletic apparel and footwear retailer is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended May 2024 but at least one analyst is warning the stock is too expensive.
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Wall Street analysts, on average, expect Nike to post earnings per share of $0.86 which represents a year-over-year change of 30.3%.
Revenues are expected to be $12.91bn (￡10.2bn), up 0.7% from the year-ago quarter.
Analysts at Bank of America have reaffirmed their ‘Buy’ rating on Nike and $113 price objective. However, Williams Trading analyst Sam Poser cut his price target on Nike to $75 as he does not believe Nike will be able “to get itself out of its current doldrums as it has when it faced challenges in the past.”
Poser said the stock is “too expensive” and he does not expect the company to do anything to “deserve its current multiple.”
BofA analysts said they see some green shoots in what Nike is doing but warn that Nike faces a mix of headwinds in the first half of 2025.
“We see sufficient margin levers in the near-term to support earnings and are beginning to hear about green shoots around innovation and the new product pipeline,” the bank’s analysts wrote.
“We don’t expect these green shoots to translate into sales growth in the first half of fiscal 2025, but building evidence of Nike’s innovation pipeline would bolster confidence in a 2H25 turnaround.”
UBS analysts are more optimistic about H&M's profitability. ·(ymgerman via Getty Images)
H&M (HM-B.ST) — Reports quarterly results on Thursday 27 June
European fashion retailer Hennes & Mauritz AB has seen its stock upgraded by UBS from Neutral to Buy ahead of its quarterly results.
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H&M’s stock was upgraded as UBS analysts are more optimistic on the company’s profitability as it begins to show signs of a sales recovery.
UBS also increased the price target for H&M's stock to SEK212.00 (￡15.95) from the previous SEK148.00 (￡11.13).
Deutsche Bank said the Swedish fashion retailer is “set to report another strong set of numbers” for the quarter$ftsss and expects margin recovery to be in the focus. The German bank has lifted its share price target from SEK155 to SEK165 but has maintained its sell rating for the stock.
The company's earnings are expected to grow by 16.9% annually, outpacing the Swedish market forecast of 14.1%.
Currys (CURY.L) - Reports full-year results on Thursday 27 June
Electrical retailer Currys’ results will tell investors a lot about how consumers are doing under the cost of living squeeze.
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At its first-half results in December, Currys’ balance sheet appeared less robust than AO World's. Despite net debt being only ￡101m, the FTSE 250 (^FTMC) company had a ￡190m pension liability and leases totalling ￡1.1bn.
This financial backdrop made the February bid from activist investor Elliott surprising. Elliott initially offered 62p per share, later increasing it to 67p, representing a 42% premium. However, management and investors held firm, and Elliott withdrew its bid in March.
Currys’ shares have remained above the offer price, bolstered by improved trading and the disposal of its Greek business. CEO Alex Baldock raised earnings expectations twice, with the year-end trading update in May marking a positive outlook.
For the full year, Baldock reported a 2% like-for-like drop in group-wide sales, with the UK down 2% and the Nordic region down 3%. However, both areas showed improved momentum in the second half. He indicated that adjusted pre-tax profit, excluding Greece, would range between ￡115m and ￡120m, surpassing the prior expectation of ￡105m and close to last year’s ￡119m outcome.
“The fact that broadly flat profits should be seen as good news is a sign of how tough trading has been for Currys, where the Nordic business in particular has been under pressure and the cost-of-living crisis has put the squeeze on UK consumers,” AJ Bell wrote.
“Again, improving consumer confidence thanks to cooling inflation, solid wage growth, lower energy bills and low unemployment could help Currys if those trends are maintained, even though its target market remains fiercely competitive.”
If Baldock provides guidance for the new fiscal year, consensus estimates project:
Group sales of ￡8.5n, slightly down from ￡8.6bn due to the Greek business disposal