Hello, and welcome to The Week Ahead from The Financial Times in London. Here are some of the big stories we’ll be watching this week.
The world’s largest retail chain, Walmart, reports results. Venezuela goes to the polls in a presidential election that’s been slammed by the international community. New faces at Burberry, but what will investors be looking for when the venerable British fashion house reports full-year results. And is Japan’s longest growth spurt since 1989 about to come to an end? We’ll find out when the country releases first-quarter GDP figures.
Let’s start with Walmart. It’s been a busy month for the retail group. First, it retreated from the UK markets when it merged its British operation, Asda, with rival supermarket chain Sainsbury. Then it signalled its intention to move towards deal making and developing economies when it bought the Indian company, Flipkart, for $16 billion, in. what was the world’s largest e-commerce investment.
So what will investors be looking for when Walmart reports first-quarter results this week? Here’s our US reporter Anna Nicolaou.
So I think there’s a lot of focus on what the strategy is going forward. What this all means in the context of Walmart’s e-commerce strategy. In the last quarter, the issue was that their e-commerce sales in the US were a lot slower than they’ve been in previous quarters. They grew 23% for the quarter, whereas in previous quarters it was about 50% to 60%. So investors took that very poorly. They sold off the stock that day, and kept selling it the past few months. And it’s put more pressure on Walmart to stoke growth in e-commerce. They’ve been behind Amazon the whole time. And the question now, I guess is, is this Flipkart deal enough to push them forward?
Next to Venezuela, which will hold presidential elections on Sunday. But with key opposition figures either barred from running, under arrest, or languishing in exile, there seems only one possible outcome, a phony victory for the incumbent Nicolas Maduro, who should be sworn in for another six years in power. Assuming he does win, the US and possibly the EU, Japan, and Latin American nations, are likely to step up their pressure on Caracas. The US is likely to announce further sanctions after Sunday’s vote.
But none of this appears to be bothering Mr Maduro. He was in bullish mood while on the campaign trail.
And now to Burberry, which reports results for the year to March this week. Analysts are expecting sales growth of 2% to 3%, revenue of around £2.73bn, and adjusted operating profits of around £453m.
In the last of a series of major executive changes, chairman John Peace will bow out to be replaced by Gerry Murphy. There have been lots of new faces at Burberry lately, and this year’s annual meeting represents a drawing down of the curtain on the Christopher Bailey era. Mr Bailey relinquished the role of chief executive last July, and stepped down from his creative role in March.
Marco Gobbetti, his successor to the top job, unveiled some strategic changes last November. But it’s unlikely they’ll have much impact on this year’s numbers. This meeting is all about the mood music, as our retail correspondent, Jonathan Eley, explains.
There’s been an almost complete changing of the guard in all the positions that matter to this company. We already know, really, that there’s going to be probably no surprises in trading. That the company’s last trading update covered a really important part of the year, encompassing the golden week holiday in China, and also Christmas in the western Hemisphere. Everything was broadly OK. Their forecasts didn’t change. So it’s all really about the strategy, the mood music, and also looking forward to the new chief creative guys’ first show, which will be in September this year.
And finally, Japan’s longest growth spurt since 1989 is expected to end this week, with analysts forecasting a small economic contraction of 0.1% in the first quarter of 2018. It will be the first decline after eight consecutive quarters of growth.
Data on consumption and capital goods shipments, plus a somewhat stronger yen in recent quarters, point to a mild slowdown in the economy. But what would a slight dip into negative territory mean for a country with low unemployment levels and strong corporate profits? Our Tokyo bureau chief, Robin Harding, reports.
Analysts expect a contraction this time around of about 0.1% on an annualised basis. If that does come to pass, it won’t indicate a start of a new recession. Most analysts think this is a temporary lull, partly caused by strength in the yen, and expect to return to growth later in the year.
And that’s what the week ahead looks like from The Financial Times in London. See you again next time.
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