The week ahead: ASOS, Pearson

Another week, another potential banana skin for the retail sector, while accident-prone Pearson tests investor nerves and patience, writes Lee Wild.

Monday 15 October

Trading Statements

Schroders, Rio Tinto

AGM/EGM

Pires Investments

Tuesday 16 October

Trading Statements

BHP Billiton, IXICO, Merlin Entertainments, Smartspace Software, B.P. Marsh & Partners, Netcall, Nanoco, dotDigital, Bellway

AGM/EGM

Frontier Developments, Ashley (Laura), Telstra Corporation

Wednesday 17 October

ASOS

Final results for the year ended 31 August 2018, published mid-week, will be closely watched. The past two trading updates have not gone well for ASOS. First, at the half-year results in April when AIM's largest company ramped up investment in the business to as much as £250 million, then in July when it warned retail sales would grow at the lower end of the 25-30% expected this year.  

We've seen mixed results from the sector in recent weeks, but Boohoo's interim results were impressive and full-year guidance upgraded. ASOS will hope the warm summer weather did for its own sales what it did for Boohoo's.

Retailers are under the cosh and cannot afford to disappoint the market. Miss estimates and expensive ASOS shares could become significantly cheaper. 

Source: TradingView (*)      Past performance is not a guide to future performance

Pearson

A 200% rally from the financial crisis low unwound in spectacular fashion through 2015, and a rebound was subsequently scuppered by falling sales in 2016 and another profit warnings early last year. Now recovery number two has come unstuck not far from the 2016 peak, and investors can never be confident during results time at Pearson.

First-half numbers in July were better than some had expected, but while there was no change to the full-year outlook, chief executive John Fallon admits there is "still much to do". At this nine-month trading update, look for any change in current forecasts for adjusted operating profit of £520-£560 million and adjusted earnings per share of 49-53p.

This is a big quarter for the US Higher Education Courseware business, and accurately predicting results here is notoriously difficult. After modest growth in the first half, net sales are expected to fall over the next six months, and be flat to down mid-single digit for the full year.

Also watch for news on the US K-12 curriculum business. Pearson has wanted to sell it since last year, but seems in no rush.

Source: TradingView (*)      Past performance is not a guide to future performance

Trading Statements

Mediclinic International, Hochschild Mining, Segro, Pearson, Barratt Developments, ASOS, CAP-XX, Tristel

AGM/EGM

Tlou Energy

Thursday 18 October

Trading statements

Rentokil Initial, International Personal Finance, Domino's Pizza, Rank Group, National Express, Unilever, Applied Graphene Materials

AGM/EGM

Rank Group, Falcon Oil & Gas

Friday 19 October

Trading statements

London Stock Exchange Group, Dechra Pharmaceuticals, InterContinental Hotels, Provident Financial, Acacia Mining

AGM/EGM

Ashmore Group, Purplebricks