The pressure on Marks & Spencer boss Marc Bolland will intensify tomorrow when the retail chain announces a fall in profits for the third year in a row.
The market consensus is for the department store to post full-year pre-tax profits of £615m, compared with underlying pre-tax profits of £665.2m last year, which at the time was the lowest level since 2009.
The retailer has fallen a long way from its pre-recession peak when it posted £1bn in profits. And its profits have also dipped below those of rival Next, which recently reported a full-year haul of £695m.
Mr Bolland told investors at last year’s results that the prospect of better returns within the next year was no “fairytale”.
Conditions have remained challenging since then, but there have been recent signs of encouragement after sales figures showed the green shoots of recovery in its struggling fashion business.
In an April trading update, the firm said clothing sales rose 0.6% on an underlying basis, driven by “clear signs of improvement” in womenswear, following last autumn’s relaunch of its M&S Collection.
Across general merchandise, which includes homeware as well as clothing, like-for-like sales were down by a smaller-than-expected 0.6% in the quarter, although this extends a three-year run of falling sales at the division.
Deutsche Bank, which has a “hold” rating on the stock, said it will pay close attention to what Mr Bolland and his management team have to say about the loss of clothing market share to cheaper rivals.
The bank added it would treat “bullish guidance cautiously” from the management because investors have suffered “two years of disappointment and market share losses”.<p/>
Tough trading conditions across Europe will be felt in Vodafone’s annual results presentation on tomorrow, with the City expecting profits to fall to £12.9bn from £13.6bn a year earlier.
It has been squeezed by increasing price competition in its major European markets of Germany, the Netherlands and the UK.
The Newbury-based operator has also seen falling service revenues across central and southern Europe as a result of the continent’s fragile economic recovery.
Analysts expect Vodafone to meet its full-year forecasts, despite tough trading conditions across Europe.
The market predicts the business will turn in annual sales of £43.4bn, compared to £44.4bn a year ago.
JP Morgan believes that UK service revenues will slip 5% and that “very intense” price pressures will lead to a fall of 16.5% in Italy.
Only in emerging markets will analysts look for growth. JP Morgan expects to see service revenues in Turkey grow by 4.4% and by 13% in India.
However, Vodafone’s performance is expected to be in line with European-based telecoms firms where JP Morgan expects to see a 5% fall in profits across the board.
Vodafone cheered the market in February when it said it would give back around £50bn in cash and shares to investors as a result of the £130bn US sale of its 45% stake in Verizon Wireless to its joint venture partner, Verizon.
In January US rival AT&T ruled out a bid for Vodafone knowing that it was about to become smaller. This leaves Vodafone itself looking for targets to buy.
Morgan Stanley said: “Vodafone’s presence in most big European markets makes it one of the companies most exposed to potential synergies.”