Earnings This Week: Vodafone, Royal Mail and US big box retailers

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Josh Warner
By : ,  Market Analyst

Corporate earnings calendar: May 16-20, 2022

The US corporate calendar is headlined by the country’s biggest retailers, including Walmart, Home Depot, Target and Lowe’s, which should reveal how the US consumer is behaving in a tough climate dominated by the cost-of-living crisis. Other big names to watch out for include chipmaker Applied Materials and IT behemoth Cisco. We will also see results out from Chinese outfits JD.com and Tencent Music this week, as well as southeast Asia’s superapp Grab.

Meanwhile, the UK calendar picks up this week with updates due out from baker Greggs, insurer Aviva, telecoms giant Vodafone, luxury goods firm Burberry, postal outfit Royal Mail, and low-cost airlines easyJet and Ryanair.

Monday May 16

Ryanair FY

Tencent Music Q1

Tuesday May 17

Walmart Q1

Home Depot Q1

JD.com Q1

Imperial Brands H1

Vodafone FY

Greggs Q1

Wednesday May 18

Target Q1

Lowe's Q1

Cisco Q3

Experian FY

Aviva Q1

Burberry FY

British Land FY

Thursday May 19

Applied Materials Q2

Grab Q1

easyJet H1

Royal Mail FY

National Grid FY

Friday May 20

Close Brothers Q3



Ryanair is in recovery mode as the travel industry hopes to bounce back from the pandemic this summer. The airline carried around 97.6 million passengers in the year to the end of March. That is up from just 27.5 million the year before but remains well below the 148 million it was handling before the Covid-19 crisis hit. Revenue is forecast to soar to EUR4.9 billion from EUR1.6 billion as a result but it is expected to stay in the red and report a net loss of EUR356.1 million. Analysts believe passenger numbers will hit 164.9 million this year and surpass pre-pandemic levels, which is set to see Ryanair escape the red and return to profit.


Tencent Music

Tencent Music runs the three most popular music streaming platforms in China and the company continues to convince more users to upgrade and subscribe. However, it makes most of its money from the social entertainment side of the business built around the likes of live streaming and karaoke and user numbers are falling drastically amid tough competition from the likes of TikTok. It is trying to become more competitive and is preparing to launch a metaverse music app by the end of this year. The overall result is expected to see revenue fall over 14% from last year, tighter margins and a 34% plunge in net profit in the first quarter.

You can read the full preview ahead of the Tencent Music earnings here.



Big box retailer Walmart is expected to be resilient in the current inflationary environment, with its scale and size allowing it to handle rising costs and keep prices down for cost-conscious consumers. Still, comparable sales growth in the US is forecast to slow to 1.9% in the first quarter compared to the 5.5% to 9.9% quarterly lifts seen in 2021. Profits are set to fall thanks to tough comparatives from the year before. Wall Street currently believes Walmart’s initial guidance for 2022 is on the conservative side, meaning some think an upgrade could be on the cards at some point this year.

You can read the full preview ahead of the Walmart stock earnings here.


Home Depot

Home improvement retailer Home Depot will struggle to grow in the first quarter amid tough numbers from the year before, when sales and earnings exploded amid a pandemic-fuelled rise in demand for DIY during lockdown. Revenue is forecast to fall 1.9% to $36.8 billion and comparable sales are set to fall 1.4%. Diluted EPS is expected to fall 3.9% to $3.70. This will be the toughest quarter in terms of comparatives, but this will get easier as the year goes on and markets anticipate both sales and earnings will start to grow again in the second quarter. Investors will want reassurance over the outlook as rising interest rates and any subsequent slowdown this causes in the housing market could impact growth, as would any cutback in consumer spending on big-ticket items amid the cost-of-living crisis.



Chinese ecommerce giant JD.com is expected to report a 16.5% rise in revenue when it releases first quarter earnings, but that will be slower than what we saw last year as Covid-19 continues to hit the Chinese economy and consumers tighten their belts. Operating profit is forecast to plunge 85% as costs soar and squeeze already razor-thin margins. The company was recently flagged by the SEC as a company that could be forced to delist from American exchanges as the US and China continue to disagree on a mutually agreeable way to audit companies with listings in both countries.

You can find out everything you need to know ahead of the JD.com earnings here.


Imperial Brands

Imperial Brands, like the entire tobacco industry, is trying to shift to healthier alternatives, forcing them to invest the money they make pedalling cigarettes into new products like heated tobacco and vape pens. First half revenue is set to be broadly flat year-on-year at constant currency, but this should grow in the second half as price rises come into effect. Adjusted operating profit is set to rise around 2% at constant currency as its portfolio of next-generation products delivers smaller losses. Volumes will be in focus as people tighten their belts and return to work, which could impact the amount and the brands that people smoke and undermine the shift to new alternatives.



Vodafone releases annual earnings this week and management could face questions about reports from the Financial Times that it is planning to combine its UK operations with rival Three UK, owned by CK Hutchinson, as it continues to simplify its business across Europe. That would bring together the third and fourth largest mobile networks in the country but could face regulatory hurdles. In terms of the fourth quarter, analysts are looking for 1.6% revenue growth to EUR11.4 billion, with service growth slowing to just 0.3% as it comes up against tougher comparatives. Annual revenue is forecast to rise 3.6% to EUR45.4 billion and adjusted Ebitdaal – its new headline earnings measure – is expected to rise over 6% to EUR15.3 billion. The outlook will be under the spotlight along with its medium-term goal of delivering mid-single digit Ebitdaal growth in an inflationary environment.



Greggs will be providing a first quarter trading update this week and investors will want to see evidence that demand is holding up and that it has a handle on costs in the current environment. Last year saw it bounce back from the pandemic and continue the rollout of new stores and distribution channels while growing its dividend as well as special payouts. We know like-for-like sales were up 3.7% versus 2020-levels in the first nine weeks of 2022, but things have are likely to have become more challenging since early March.



Shoppers flocked to Target during the pandemic, resulting in an acceleration in sales and earnings growth. The big box retailer believes it can keep up the momentum and is targeting mid-single digit sales growth and high-single digit growth in earnings in 2022, and investors will want reassurance this week considering costs are on the rise and the pandemic-fuelled boom in sales is unwinding and causing tough comparatives. Wall Street expects Target will see comparable sales rise 1.2% in the first quarter, which is markedly slower than the 12.7% growth delivered during 2021. Overall revenue is forecast to rise 2.2% year-on-year to $24.4 billion. Adjusted EPS is expected to fall 16.2% from last year to $3.09 as it comes up against tough figures from the year before, when earnings rose six-fold. 



Lowe’s is expected to see sales fall for the first time since the start of the pandemic in the first quarter, with analysts pencilling-in a 2.2% fall to $23.9 billion as comparable sales are forecast to drop 3.3%. Diluted EPS is set to grow 1% to $3.24. Importantly, this will be the hardest quarter in terms of comparatives of 2022, with the prior year numbers flattered by the boost provided by government stimulus cheques, and its performance is expected to improve from the second quarter onwards. The outlook will be the primary focus considering it has said sales will either fall or rise by 1% from last year to $97 billion to $99 billion. Lowe’s exposure to the DIY market could prove a problem if there is a slowdown in the housing market as expected this year, twinned with customers tightening their belts as prices rise.



Supply chain pressure and rising inflation could weigh on Cisco’s growth in the third quarter of its financial year and there are fears that the chip shortage could be delaying Cisco’s ability to secure new customers and result in a more cautious outlook. Revenue is forecast to grow 4.2% in the quarter to $13.3 billion, toward the upper-end of its 3% to 5% target, and adjusted EPS is expected to rise 3.9% and hit the middle of its guidance range at $0.86. Cisco is currently targeting 5.5% to 6.5% revenue growth in the current financial year and adjusted EPS of $3.41 to $3.46, up from $3.22 the year before. Markets believe Cisco can meet those expectations but will want some reassurance given the uncertain environment.



Experian, which deals in vast amounts of data used for everything from credit checks to mortgage applications, has performed better than originally expected this year as demand has risen across all of its geographies. Revenue is forecast to rise 17% in the 12 months to the end of March to $6.28 billion as Experian targets organic growth of 12% to 13%, and benchmark Ebit is expected to jump 19% to $1.65 billion as margins also improve.



Aviva’s trading update this week will provide an insight into how the company, which offers insurance, savings and retirement services, has fared in early 2022. The company provided a very upbeat outlook in its last update, having raised its ambitions and distributed more cash to investors. This will be the first set of results since Charlotte Jones took over as chief financial officer and joined from her role at RSA Insurance. Investors have already been assured on what to expect in terms of returns over the next two years after stating it would hike its dividend 40% in 2022 to 31.5p and then 33.0p in 2023, with low-to-mid single digit growth in payouts thereafter. We could see more money returned if cashflow holds up.



Luxury goods outfit Burberry is set to report its first rise in annual sales in four years when it releases full year results this week, with markets anticipating a 20% jump to £2.82 billion. That is thanks to a recovery in demand following a collapse in retail and wholesale demand in 2021 as well as higher prices. Burberry has been working hard to rebuild its brand and is starting to deliver results by having tighter control over inventory and improving the sales price of its goods. That has provided a solid foundation for its new CEO Jonathan Akeroyd from Versace, who took over at the helm in April. Adjusted operating profit is expected to jump 32% to £521.3 million. Buyers of expensive luxury goods should prove more resilient to the cost-of-living crisis and the industry is far better-placed to pass on higher costs to customers without impacting demand.


British Land

British Land, which owns shopping centres, leisure sites and city centre offices, is set to hit a milestone when it releases annual results this week. Underlying profit – its headline measure – is expected to rise 15.9% to £232.9 million in the year to the end of March, driven by a rebound in rental revenue which has declined for five consecutive years. However, there remains concerns how the inflationary environment could impact consumer spending this year, which could provide new headwinds for retailers, while the new hybrid way of working is also changing the landscape for office space.


Applied Materials

Revenue is forecast to rise 14% year-on-year in the first quarter to $6.36 billion and adjusted EPS is expected to grow at an even faster rate of 16.9% to $1.91. That will be impressive given the tough figures from last year. Supply chain problems are constraining topline growth and this will be reflected in mild sequential growth in revenue. Semiconductor Systems should remain resilient as orders from foundry partners holds up and Applied Global Services should also perform well as activity in factories picks up. Notably, Display & Adjacent Markets is set to see sales grow for the first time in three quarters this week. Notably, Brice Hill became chief financial officer in March after becoming a free agent following AMD’s acquisition of Xilinx.



Grab, Southeast Asia’s ‘superapp’, celebrated a record year in 2021 as more people used its app to get food delivered to their door, hitch a ride or make online payments. The company, which handles over half of the entire region’s food delivery orders, went public in late 2021 but has struggled ever since listing, with shares having lost over 78% in value to trade at all-time lows. We may see things improve considering lockdown has eased in key countries like Singapore and Malaysia, but sentiment remains wounded by rising costs and more intense competition. Wall Street is looking for $133.2 million in revenue and an adjusted Ebitda loss of $327.5 million in the first quarter of 2022.



Low-cost airline easyJet has already provided a glimpse into what to expect when it releases interim results this week. Capacity is expected to return to pre-pandemic levels this summer and was operating at 80% in March, a significant improvement from the 67% average during the latest quarter. Revenue will be around £1.5 billion, but this will still be below the £2.05 billion in headline costs. Analysts believe the recovery this summer will help easyJet return to profit this financial year after booking heavy losses during the past two years with a significant improvement pencilled-in for the 2023 financial year.


Royal Mail

Royal Mail is going through a period of uneven growth as the surge in demand to send parcels during the pandemic unwinds and volumes remain volatile month-to-month. Revenue is forecast to rise just 1.5% this year to £12.8 billion, although this will be welcomed considering the 16.6% surge seen during the pandemic last year. Adjusted operating profit is expected to grow 9.8% to £770.5 million, which would also be impressive considering this more than doubled the year before. Notably, that is well above the £430 million earnings guidance outlined by the company back in January. Royal Mail has warned Covid-19 will continue to hang over its performance early on in the current financial year and said it is targeting £220 million in cost-savings going forward.


National Grid

National Grid has benefited from the surge in energy costs in the UK and this prompted it to say it would beat expectations in terms of underlying operating profit when it releases annual results this week. Markets believe the metric will rise 17.4% from last year to £3.85 billion. That will also reflect the consolidation of Western Power Distribution into its earnings as it focuses on electricity grids, with plans to offload a 60% stake in its UK gas transmission and metering units in progress. That will raise key funds for investment and will help cut costs and improve efficiency. Its US operations are set to meet expectations. National Grid is poised to perform well in an inflationary environment as prices are indexed, although a sharp increase could temporarily push up debt until corresponding price rises take effect.


Close Bros

UK merchant banking group Close Brothers will provide a third quarter trading update this week. These brief updates focus on the general performance of its banking, asset management and its Winterflood securities division and what has previously proven to be a vague outlook for the full year. Winterflood is where the uncertainty lies considering its is highly sensitive to changes in the markets, which has seen sentiment take a battering over the last week. Markets are expecting profits to fall around 7% over the full year amid tough comparatives from last year.


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