Consumer sentiment and broader economic health will be in focus in the coming week, with US jobs data due to be released, along with earnings from retail sector companies on both sides of the Atlantic.
Investors will look for any signs of a further slowdown in the US labour market when the Bureau of Labor Statistics (BLS) releases its latest jobs report on Friday 3 October.
In terms of earnings, sportswear brand Nike (NKE) is set to report as it faces pressure from US president Donald Trump’s tariffs and competition from upstart brands.
In the UK, Tesco (TSCO.L) will report on its half-year performance, following a strong start to the year for Britain’s biggest supermarket by market share.
Bakery chain Greggs (GRG.L) will update on its performance over the third quarter, after having reported a fall in profits in the first half.
Meanwhile, pub chain JD Wetherspoon (JDW.L) will report its full-year figures, having already flagged that sales had overtaken pre-pandemic levels, with sunny weather boosting trade in the fourth quarter.
Here’s more on what to look out for:
August’s jobs report showed that just 22,000 new jobs were added to the US economy that month, according to figures released by BLS in early September.
That was well below the 75,000 figure expected by economists, while the rate of unemployment ticked up to 4.3%, which was in line with forecasts, according to data from Bloomberg.
Victoria Scholar, head of investment at Interactive Investor, said that September’s report “is expected to provide further confirmation of a deteriorating labour market”.
She said that the headline non-farm payrolls (NFP) figure for September is anticipated to come in at around 70,000, while the unemployment rate is “likely to remain at 4.3%”. Meanwhile, she said that average hourly earnings are expected to show steady growth of 3.7% year-on-year, but slow 0.2% month-on-month.
Investors will also be keeping an eye out for any more revisions to data from previous months.
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Scholar said that August’s weaker-than-expected NFP reading paved the way for the US Federal Reserve to cut interest rates on 17 September by a quarter percentage point, to a range of 4% to 4.25%, marking its first reduction of 2025. “When making its policy decisions, the central bank is weighing up competing pressures from elevated inflation and a weak jobs market,” she said.
At the same time, Scholar said: “Comments from Fed chair Jay Powell this week highlighting the risk of cutting rates ‘too aggressively’ suggest the market might be pricing in too many interest rate cuts this year. Plus, there are unknowns about how Trump’s tariffs might impact inflation.”
“And there have been some positive data releases, including an upward revision to US Q2 GDP and weekly jobless claims which saw fewer Americans file for unemployment support last week,” she added. “All of these factors suggest that although two more rate cuts are expected before year-end, they are by no means guaranteed.”
Shares in Nike (NKE) are down 8.5%, as tariffs and increased competition from newer brands such as Hoka (DECK) and On (ON), have weighed on the sportswear brand.
In the fourth quarter, Nike (NKE) posted a 12% fall in revenue to $11.1bn (£8.3bn), while net income slid 86% to $211m compared to the same period last year and earnings per share fell by the same margin to $0.14.
However, shares jumped after the results were released as Nike (NKE) said it expected profit and sales declines to narrow in the first quarter. At the same time, Nike warned that costs from tariffs were expected to approach $1bn as the company makes additional moves to diversify its supply chain away from China.
Scholar said: “Nike hasn’t been performing anywhere near its peak.”
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“There has been an onslaught of newer, trendier, more exciting sportswear brands entering the market covering apparel and footwear that have created a major headache for the world’s largest sportswear brand,” she said. “Nike (NKE) became a bit complacent at the top and is now having to do some soul searching to try to reignite its spark with a renewed focus on sports, cost cuts and innovations.”
“As part of this shift, Nike (NKE) announced a tie-up with Kim Kardashian’s Skims, harnessing her immense social media power to try to improve engagement with female shoppers,” Scholar added. “Although its launch has been mired by production issues.”
For the first quarter, Scholar cited Refinitiv data, which showed that Nike (NKE) was expected to report earnings per share of $0.27 versus $0.70 cents year-on-year, while revenue is projected to come in at $11bn down 5% year-on-year.
Scholar said that a “lot is riding on these upcoming results as a make-or-break moment for the share price as investors assess whether there are green shoots of recovery and early signs of improvements”.
Shares in Tesco (TSCO.L) are up nearly 20% year-to-date and are trading at around their highest point since 2013, as the supermarket has continued to report strong performance and add to its dominating market share.
AJ Bell’s investment experts Russ Mould, Danni Hewson and Dan Coatsworth said that Tesco (TSCO.L) has been “helped by the woes of Morrisons and Asda, which are struggling under the debt burdens shovelled on to them by their private equity buyers”.
They pointed to data from Kantar Worldpanel, which showed that Tesco (TSCO.L) has picked up eight-tenths of a point of market share over the past year, cementing its lead over rivals.
In a June trading update, Tesco (TSCO.L) reported group sales of £16.38bn ($21.89bn) in the first quarter, representing a 4.6% increase on a like-for-like basis.
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At the time, Tesco (TSCO.L) said its guidance for the fiscal year was unchanged, continuing to expect group adjusted operating profit of between £2.7bn and £3.0bn, and free cash flow within its medium-term guidance range of £1.4bn to £1.8bn.
In terms of dividends, AJ Bell’s investment experts said that consensus estimates suggest that Tesco (TSCO.L) will raise its full-year payout to 14.2p a share from 13.7p, “so it seems logical to expect an increase in the interim distribution. The first-half payment a year ago, by way of a benchmark, was 4.25p a share.”
“Tesco (TSCO.L) is also running a £1.5bn share buyback programme,” they said. “Add that to the dividend, where consensus estimates imply a distribution worth some £900m, and Tesco’s cash yield, of buybacks plus dividends, is £2.4bn, or some 8.5% of its current £28bn stock market capitalisation.”
Greggs (GRG.L) last week announced that it was opening its first pub, serving a menu featuring its classic sausage rolls and steak bakes. The Golden Flake Tavern, located within Fenwick Newcastle, is Greggs’ latest tie-up with the department store operator and opened on 27 September.
However, the news didn’t appear to have much impact on the company’s shares, with the stock down nearly 45% year-to-date.
In the first half of the year, Greggs’ (GRG.L) total sales topped the £1bn mark, up from £960m for the same period last year. However, pre-tax profit fell to £63.5m from £74.1m in the first half of 2024. Greggs said the first half had been impacted by challenging market footfall, more weather disruption than last year and phasing of cost headwinds.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: “Greggs’ (GRG.L) valuation has come under pressure in 2025 after a challenging start to the year.”
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“Like-for-like sales growth hasn’t been as strong as markets originally hoped, rising at a slower pace of 2.6%, while operating profit fell 7.1% to £70m,” he said. “This decline reflects ongoing inflationary pressures and costs related to building two new national distribution centres.”
“The broader consumer spending environment remains fragile,” he added. “While Greggs (GRG.L) has relied on price increases to support like-for-like sales growth, the company must be careful not to stretch customer tolerance too far.”
Despite these challenges, Greggs (GRG.L) has left guidance for the year unchanged, and Chiekrie said that operating profit is expected to come in modestly below 2024’s £195m figure.
“That puts added pressure on next week’s third-quarter numbers to show an improvement in momentum,” he said. “With cash flows coming under pressure and the group falling into a small net debt position, strong execution will be critical in the months ahead.”
Shares in JD Wetherspoon (JDW.L) rose following July trading update, which gave investors a glimpse into what to expect for annual performance, ahead of its preliminary full-year report on 3 October.
JD Wetherspoon (JDW.L) reported a 5.1% rise in like-for-like sales for the 12 weeks to 20 July and chairman Tim Martin said that the company had “benefitted from favourable weather in the fourth quarter”. He added that profits were expected to be in line with market expectations, notwithstanding tax and labour cost increases.
Derren Nathan, head of equity analysis at Hargreaves Lansdown, said that JD Wetherspoon (JDW.L) had been “resilient” this year, with shares in the company currently trading 13.4% in the green.
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However, he said that the “additional cost burden from higher wages and taxes means that profit growth is proving harder to come by. Analyst forecasts imply that operating profit has flatlined at around £140m.”
“Meanwhile, the company’s guided that net debt will land at around £720m, up from £660m a year earlier,” he said. “It’s no surprise therefore that the market expects the recently re-introduced dividend to remain flat at 12p per share. But this can’t be assured.”
Nathan said that investor attention will be “firmly focussed” on the company’s outlook. “Some signs of sluggishness in the pubs and restaurant sector are already evident in the early part of this year,” he said. “Some think the group remains competitive, but challenging conditions could be exacerbated if the November budget reveals either further cost increases or a squeeze on spending power.”
Monday 29 September
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