Look ahead to FTSE 350, other companies reporting & economic events from 2 to 6 May

28 April 2022

Look ahead to FTSE 350, other companies reporting & economic events from 2 to 6 May

• Will boohoo hit guidance and restore some investor confidence?
• What now for NEXT as they raise prices?
• InterContinental Hotels Group looks to get ever closer to pre-pandemic levels
• International Consolidated Airlines could report another tough quarter

boohoo Group, Full Year Results, Wednesday 4 May

Matt Britzman, Equity Analyst

“Markets have already been prepped for what to expect in next week’s results. March’s fourth quarter trading statement pointed to cash profit (EBITDA) in the region of £125m, though analysts are pricing in £115m. And that really highlights sentiment at the minute, despite sales in line with revised guidance in the last update, a substantial profit downgrade in December means confidence is still low. Delivering on profit guidance this time around would be another step in the right direction to bring some stability back to trading.

boohoo’s troubles, though hopefully short-term, are stacking. Higher returns rates are never good for retailers and with customers back to buying going-out wear, that trend’s expected to continue into the first half of 2022. There’s also been a range of issues getting supplies overseas which has hurt delivery times, derailing the group’s main attraction – quick access to evolving trends. Commentary so far has pointed to pandemic-related issues, and given international trade is a growth area for boohoo, hopefully the supply chain pressures will ease. Inflation can’t be ignored either, higher freight costs are expected to shave £20m off cash profits for 2021. Guidance on gross margin for 2022 will be watched closely, it’ll be an indication as to how much of an impact these are set to have in the coming year.”

NEXT, Q1 Trading Statement, Thursday 5 May

Susannah Streeter, Senior Investment and Markets Analyst

“Even the retail powerhouse which is NEXT has not been immune to the challenges thrown up by the Ukraine conflict and the ensuing commodity chaos. The closure of its websites and operations in the region largely accounts for the downgrade in guidance in its full year results, but additional headwinds may be blown into this trading update for the first quarter. The short term challenge is keeping customers spending on fashion online and in store at a time when belts are being tightened all over the place. The group has already flagged it’ll be raising prices in the second half of this year, so any sign that demand is starting to drag may be a red flag. However the growth in its third-party label operations and its Total platform, which offers other retailers the benefit of its e-commerce prowess, come with less risk but with long term opportunity. NEXT will have to navigate plenty of bumps in the road in the coming year, but given its investments for growth the journey further on the horizon should be smoother.”

InterContinental Hotels Group, Q1 Trading Statement, Friday 6 May

Matt Britzman, Equity Analyst

“IHG’s been reaping the rewards of a world reopen; the Marriott owner posted revenue per available room up 46% year-on-year and 30% down on pre-pandemic levels at the end of the last financial year. This progress should have continued into Q1. Analysts are expecting 2022 sales to push beyond pre-pandemic levels so a solid start to year is important. The group’s largest region, the US, saw leisure demand recover well last year as staycation demand was strong. Domestic business demand also plays a large part but has lagged leisure in its recovery. We’ll be watching out for how that trend played out in Q1, as businesses weigh up their options in a world where meetings no longer need take place face-to-face. The next important milestone is the spring/summer period, with management expecting record US leisure demand in Q2 and Q3. In the wake of surging inflation, it’ll be interesting to see whether that discretionary spend sticks. Fresh lockdowns in China will no doubt have a negative impact on trading that looked like it was on the brink of a strong recovery last year. Hopefully there will be more colour on the extent of the impact next week.”

International Consolidated Airlines, Q1 Results, Friday 6 May

Sophie Lund-Yates, Equity Analyst

“The British Airways owner is expected to report revenue of over £3.0bn, compared to £968m this time a year ago. That comes as another wave of Covid has wreaked havoc on the airline industry, so we wonder how much that will have held back performance. We already know the impact of Omicron and seasonal trends are expected to drive a “significant” operating loss in the current period.  That means what comes next is more important. Profits had been expected to make an arrival in the second quarter, and hopefully that’s still the case. The summer months are crucial for airlines, and that’s especially the case for IAG, which has been especially punished by the pandemic thanks to its long-haul focus. All eyes will be honed on the outlook statement.  Investors should keep in mind IAG’s results will be a bellwether for the wider aerospace sector. Any worse, or better-than-expected, news will very likely have wider ramifications.”

*Events on which we will be updating investors