Week ahead: AB Foods and Sainsbury's results due

(Sharecast News) - Next week sees the release of results from Primark owner Associated British Foods, supermarket chain Sainsbury's and retailer WH Smith, while UK inflation and retail sales figures will be in focus on the macro front. Interim results from AB Foods are due on Tuesday. Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said trading at the company's crown jewel, Primark, has been mixed, with like-for-like sales growth in the UK being more than offset by weakness in continental Europe.

"Meanwhile, most of its food businesses posted low single-digit sales declines. That saw ABF downgrade its full-year underlying operating profit guidance, which is now expected to fall below last year's level of £1.7bn.

"Due to the conflict in Iran, oil, fertiliser, and freight prices have since soared, and investors will be watching whether the profit outlook has worsened further when ABF reports first-half results next week.

"Given the cyclical nature of its food businesses, the group's considering spinning off Primark. It's an interesting potential move that could sharpen management's focus and unlock value for shareholders. There's no deadline for making a decision, but it's currently looking more likely than not."

Sainsbury's full-year results be released on Thursday, along with interim numbers from WH Smith.

Chiekrie said Sainsbury's grocery sales continued to impress in the third quarter, rising 5.4% as it gained market share from the competition.

"The group's doing a great job of improving its products, value perception, and innovation more generally, which has helped sales of its premium Taste the Difference range grow by an impressive 15%. However, its general merchandise and Argos divisions were a small drag on performance. Given that these areas are more discretionary than food sales, the picture could get tougher in the coming year if oil prices remain elevated, squeezing consumers' budgets.

"Looking ahead to next week's full-year results, top-line growth alongside efficiency improvements should be enough to offset rising employment costs. And with an all-out price-war between the grocers failing to materialise, guidance for underlying retail operating profit of more than £1.0bn looks well within reach."

Across the pond, electric car maker Tesla is due to release first-quarter results on Wednesday.

AJ Bell analysts Russ Mould and Danni Hewson said consensus expectations are for revenues of nearly $23bn and earnings per share of $0.37, "and with estimates falling in recent weeks, the bar for a beat is lower".

"Tesla is running out of road to convince investors it can scale up Robotaxis and fully autonomous vehicles. For the first time in years, Tesla could generate negative free cash flow as it gears up to spend billions on AI," they said.

First-quarter earnings from US aerospace firm Boeing are due on Wednesday.

On the macro front, the latest UK jobs data will be published on Tuesday, with inflation figures out on Wednesday and retail sales on Friday.