TWO survivors of the UK retail scene – Halfords and Mothercare – will reveal their strategies for the Christmas season in updates this week.
EasyJet profits are expected to take off tomorrow after a buoyant year was rounded off by a last-minute rush for holidays after the Olympic Games.
The carrier upped its profit guidance in October as London 2012 proved to be far better than feared for the sector.
Ryanair has also upped its full-year profit guidance and said there had been a notable improvement in the market from the end of July and August, which continued into November.
EasyJet said Britons delayed travel plans until after the Olympic Games, while disruption at London airports during the event was kept to a minimum as the group told investors profits were likely to be between £310m and £320m in the year to September 30, up from £248m the previous year.
It also raised guidance in July to between £280m and £300m thanks to a strong summer on the back of a well-received advertising campaign and from cheaper fuel.
Numis Securities analysts are pencilling in profits at the top end of the carrier’s range.
Halfords will insist the so-called “Wiggins effect” is keeping the business on track on Wednesday when it unveils a slide in half-year profits.
The chain previously said it expects pre-tax profits for the 26 weeks to September 30 to be £40m to £42m, down around 20% on the same period last year.
But the profits are still above what City analysts had expected earlier this year when the company, which has 467 stores, was struggling under falling sales.
Thanks to the Olympics, the retailer saw sales bounce back to 4.6% growth in the second quarter of the year, after a 7.5% plunge in the first quarter.
The rebound was driven by a 14.7% surge in cycling sales, which the business put down to better weather and British success in the Tour de France and Olympics from the likes of Bradley Wiggins, Sir Chris Hoy and Lizzie Armitstead.
Brands like Boardman and Pendleton, named after British Olympic gold medallists Chris and Victoria respectively, have proven popular in the wake of the event.
Kate Calvert, retail research analyst at Seymour Pierce, said: “We believe a back-to-basics approach is needed to restore profitability. We do not believe Halfords is suffering from structural issues, it is suffering from maturity, a tired offer and operational inefficiencies.”
The results will be the first since new chief executive, former Pets At Home boss Matt Davies, joined although he is not expected to present them. Mr Davies replaced David Wild who quit in July after a profit warning and a sharp sales decline.
Mothercare investors will find out on Thursday if the loss-making parenting retailer has weathered the recent squeeze in consumer spending.
Experts predict half-year losses at the group will narrow to £3m after its Jools Oliver and value ranges helped it return to sales growth.
Boss Simon Calver joined Mothercare in April amid a dismal £103m loss pledging to be ruthless on costs.
The City will hear how plans to cut store numbers from 311 to 200 by 2015 in a bid to save £13m a year are going. The new UK estate will comprise 95 out-of-town sites and 105 high street locations.
Mothercare’s will report to the City after ONS figures showed sales volumes in October were worse than expected, dropping 0.8%. Inflation was also on the rise last month amid higher food bills and a near trebling of tuition fees.
