Look ahead to FTSE 350, other companies reporting & economic events from 10 – 14 July

• Wetherspoons mops up new business
• Will Barratt Developments’foundations remain solid?
• Experian should shed light on UK and US lending conditions
• Can PepsiCo continue to feed consumers with higher prices?
• Burberry wanes as China’s post-pandemic rebound loses steam

J D Wetherspoon, Trading Statement, Wednesday 12 July
Susannah Streeter, head of money and markets, Hargreaves Lansdown:
‘’As punters feel the pinch, J D Wetherspoon has been mopping up new business, as it’s managed to keep prices lower to pull in the crowds. Investors will be keen to see if the surge in sales at Easter flowed into better trading for the rest of the year. Although keeping price increases significantly below the headline rate of inflation has been paying off, higher costs have been eating into margins.

‘Spoons has been trying to widen its appeal from its traditional older customer base to a younger, more family-oriented, demographic which should provide resilience. And its value brand perception is clearly a benefit as cost-of-living headwinds continue to whip around. Cash generation has enabled further upgrades to its pubs, and it’s also enabled the firm to pay down significant chunks of debt, which fell to £738m from £906m at the last count. But it will be counting on inflationary winds to die down before profitability can recover to the same level of sales.’’

Barratt Developments, Full Year Trading Statement, Thursday 13 July
Aarin Chiekrie, equity analyst, Hargreaves Lansdown:
“Next week’s trading statement will give an early peek into Barratt Developments’ full-year performance. Analysts could expect to see that lower reservation rates across last year led to a slowdown in the number of completions. But the pullback on construction and land spend should have helped the group’s net cash position to rise from the £600m seen in May, to a mammoth £900m. 

Barratt’s already guided for pre-tax profits to land in at around £877m, down from £1.1bn in the prior year. This comes with the backdrop of higher selling charges and elevated build cost inflation, the latter of which ran hot at 9-10%, which have both acted to squeeze margins. Build cost inflation was expected to ease to around 5% this year, and investors are keen to hear if there’s been any change on this front in next week’s update.”

Experian, Q1 Trading Statement, Thursday 13 July
Matt Britzman, equity analyst, Hargreaves Lansdown:
“First-quarter results from Experian should shed light on how lending conditions in both the UK and US are holding up, with implications that go far beyond Experian alone. Revenue guidance of 4-6% organic growth over the year is a clear sign that market conditions are softening. That’s not too surprising, as inflation and interest rates remain high.

Nonetheless, margins should remain resilient given the essential nature of various product lines adds pricing power – identity, credit and fraud checks are hardly something businesses can ditch altogether. In the longer term, the picture continues to remain a healthy one. As the world continues to digitise, the data-led solutions that Experian can offer businesses and consumers will likely act as ongoing growth drivers.”

PepsiCo, Q2 Results, Thursday 13 July
Aarin Chiekrie, equity analyst, Hargreaves Lansdown:
“Second-quarter results will show how well PepsiCo’s handling the pressure of rising input costs. Last quarter, organic revenue grew 14.3% to $17.8bn, reflecting strong growth across Europe and the Americas, driven largely by continued price hikes. Despite inflationary headwinds pushing up costs, improved sales and other cost management measures helped keep underlying operating profit growing at a faster pace.

After the impressive first quarter, Pepsi’s already bumped up its full-year organic revenue guidance from 6% growth to 8%. That signals that management’s confident it can continue feeding through price hikes to customers while seeing little drop off in volumes – credit to Pepsi’s laser-like focus on brand quality in recent years. But investors are curious to see just how quickly these price hikes will get phased on to customers. Raising prices too sharply could risk leaving a bad taste in consumers’ mouths, pushing loyal customers down the value chain towards cheaper alternatives.”

Burberry Group, Q1 Trading Statement, Friday 14 July
Susannah Streeter, head of money and markets, Hargreaves Lansdown:
’Investors’ enthusiasm for Burberry has waned as China’s pandemic snap-back has showed signs of fizzling out. The company relies heavily on the region and, although there had been a rebound in sales as Covid restrictions eased, evidence of an economic slowdown has seen its share price retreat sharply since April’s highs.

Although the company had maintained existing guidance for the year, investors will be eager to find out if current economic uncertainty will cloud the outlook. However, Burberry’s core customers do usually have wealthy layers of protection from slowdowns and keeping the brand in favour with demanding fashionistas is much more important. It’s been paying off so far with Burberrys’ all important leather bags and coats selling well, a trend which will be closely watched for any signs of weakness.’’

FTSE 100, FTSE 250 and selected other stocks scheduled to report next week:

*Events on which HL will be updating investors