Wednesday preview: Tesco to report 'soft' third quarter

3rd Dec 2013 15:16

Tesco is expected to report a 1.4 per cent fall in UK like-for-like sales in its third quarter results on Wednesday, according to broker Jefferies International.The supermarket's fall in sales will reflect stiff competition, the "wider industry backdrop" and "challenged international performance", the analyst added in a note to investors last Friday. The anticipated overall drop will also be driven by a soft consumer backdrop that followed the summer splurge, rather than a sudden relative softening in Tesco's performance. "We assume the Christmas lift will be particularly late this year, as suggested by industry data," Jefferies said. "Still, we remain frustrated by Tesco's reliance on couponing to drive footfall, and we would like to see these tactics reduce as product relaunches and store revamps progress further. Arguably, at a time when the investment focus has shifted online, mgmt may further reconsider its current UK store expansion plans."While the impact on earnings expectations is limited, Jefferies said it hopes the group will signal a step-up in efforts on cashflow and returns optimisation.The broker expects a soft third quarter with 0.3% group sales growth."We estimate flat sales across all major divisions with LFL declines ranging from -1.4% in the UK to -4.5% in Europe and -5.3% in Asia. Continuous deterioration internationally, however, remains an incremental headwind (only partly attributable to macro weakness)."Jefferies issued a 'buy' rating and a target price of 444p. Wednesday December 4thINTERIMSGreenko Group, International Greetings, MDM Engineering Group Ltd. (DI), Micro Focus International, Polar Capital Holdings, Science In SportINTERIM EX-DIVIDEND DATEAlliance Pharma, Alpha Real Trust Ltd., Atkins (WS), Aukett Fitzroy Robinson Group, Brown (N.) Group, Cello Group, Cranswick, Creston, De La Rue, Dee Valley Group, Dee Valley Group (Non-Voting), Edge Performance VCT 'D' Shares, Electrocomponents, Establishment Inv Trust, European Residual Income Investments Cell, Fuller Smith & Turner, Headlam Group, Helical Bar, Hogg Robinson Group, Homeserve, Intermediate Capital Group, JD Sports Fashion, London Stock Exchange Group, LondonMetric Property, Majestic Wine, Management Consulting Group, National Grid, Norcros, PayPoint, Phoenix IT Group, Rensburg AIM VCT, SABMiller, Severn Trent, Shanks Group, Slingsby H.C, Tarsus Group, TR Property Inv Trust, UK Mail Group , Value and Income Trust, VP, Worldwide Healthcare TrustQUARTERLY PAYMENT DATEBlackrock North American Income TrustQUARTERLY EX-DIVIDEND DATEBank of America Corp., F&C Commercial Property Trust Ltd., Land Securities GroupINTERNATIONAL ECONOMIC ANNOUNCEMENTSBalance of Trade (US) (13:30)Beige Book Fed Survey (US) (19:00)Crude Oil Inventories (US) (15:30)GDP (1st release) (EU) (10:00)ISM Non-Manufacturing (US) (15:00)ISM Services (US) (15:00)MBA Mortgage Applications (US) (12:00)New Homes Sales (US) (15:00)PMI Composite (EU) (09:00)PMI Composite (GER) (08:55)PMI Services (EU) (09:00)PMI Services (GER) (08:55)Retail Sales (EU) (10:00)Q3TescoGMSBeacon Hill Resources, Bumi, Hibu, ViaLogyFINALSBrewin Dolphin Holdings, Numis CorporationIMSSTescoSPECIAL EX-DIVIDEND PAYMENT DATEBritish Empire Securities & General Trust, Direct Line Insurance Group, Rights & Issues Inv Trust Capital SharesEGMSNew World Resources A SharesAGMSAB Dynamics, ASOS, BlackRock Greater Europe Inv Trust, Churchill Mining, Conexion Media Group, Frontier IP Group, International Mining & Infrastructure Corporation, Renewable Energy Generation Ltd., Schroder Oriental Income Fund Ltd.UK ECONOMIC ANNOUNCEMENTSBRC Shop Price Index (00:01)Official Reserves (09:30)PMI Composite (09:30)PMI Services (09:30)FINAL DIVIDEND PAYMENT DATEJupiter Primadona Growth Trust, RegenersisFINAL EX-DIVIDEND DATEAberdeen Asset Management, Associated British Foods, British Empire Securities & General Trust, Britvic, Clean Energy Brazil, CVS Group, Debenhams, Greencore Group, Inland Homes, Northamber, Pan African Resources, Town Centre Securities, YouGovRD