Economic concerns in the wake of the Brexit vote are expected to continue on to next week as Marks & Spencer and Sports Direct prepare to deliver their first quarter and full year results respectively.
The two retailers are also anticipated to give their views on the impact of the referendum once their reports are released on Thursday.
M&S’ shares were hit hard in the two days after Brexit, plunging 22 per cent amid rising concerns on the economy and consumer confidence across the retail sector.
Although it bounced back a little bit as markets recovered, it’s anticipated that first quarter figures on Thursday could reveal further sales decline in clothing.
M&S is no stranger to economic pressure as sales of its clothing arm failed to recover in the last financial year and new chief executive Steve Rowe warned profits would be knocked by turnaround efforts.
When the company’s full-year figures were posted in May, Rowe said there would be no quick fix to revive its beleaguered general merchandise business as sales dropped 2.9 per cent in that yearly period.
However, it also posted a 4.3 per cent rise in underlying pre-tax profits to £689.6 million for the full year to April 2.
Rowe’s recovery strategy included a pledge to cut everyday prices for almost a third of M&S’ clothing ranges, boosting staff numbers on the shop floor, and plans to win back the retailers’ once loyal army of female shoppers aged 50 and over.
But he admitted it would take time to turn around clothing sales, and the stock market response has since been lukewarm.
Analysts believe M&S’ first quarter will have been impacted by poor weather in April and June, clearance sales at BHS, as well as tough comparisons from a year earlier.
Sports Direct, whose chief executive Mike Ashley has been grabbing headlines this year, is also expected to repost a post-Brexit plunge when its annual figures are released on Thursday.
Investors reportedly remain worried over the outlook the UK’s retail sector, especially after other retailers this week raised concerns.
Carpetright warned Brexit could trigger “uncertainty” among shoppers while online grocer Ocado stated supermarket prices could soar as the falling value of the pound increases pressure on rising import costs.