Morrison Supermarkets is expected to post another fall in sales when it unveils its first quarter results Thursday.
The UK grocer is forecast to report a 2.0% drop in like-for-like sales, according to Jefferies International.
However, it will be a step up from the 4.1% decline seen in the fourth quarter last year.
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"As importantly, Morrisons is starting to display greater trading prowess, with the group having moved back onto the front foot in its marketing efforts (e.g. the association with popular UK TV shows, the new Pay Day Bonus initiative), and this seems to be filtering through to a more resilient footfall performance," the broker said in a note last week.
On the other hand, the analyst believes a lack of extensive convenience store offering continues to weigh on growth. Morrisons has been working to address the issue with M-local, its new convenience programme.
"Over the near term we expect a softening second half comparable structure to allow for a further improvement in sales momentum from late this summer," Jefferies added.
"On a more structural basis, addressing the lack of exposure to the fastest growing channels should combine with meaningful cost savings opportunities (further enabled by the recent implementation of the new IT platform)."
The analyst recommended a 'buy' rating and a target price of 310p.
Morrison's latest results will come a day after rival supermarket Sainsbury posted a 6.2% rise in annual profits to £756m.
Other FTSE 100 companies to watch Thursday will be Experian, ENRC and Old Mutual.
Thursday May 9th
Britvic, United Drug
INTERIM DIVIDEND PAYMENT DATE
Begbies Traynor Group, Ingenious Entertainment VCT 1 G Shs, Ingenious Entertainment VCT 2 G Shs
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Continuing Claims (US) (13:30)
Initial Jobless(US) (13:30)
Wholesales Inventories (US) (15:00)
Barratt Developments, Beazley, Eurasian Natural Resources Corp., Hammerson, Hansard Global, London Mining, Morrison (Wm) Supermarkets, Old Mutual, Provident Financial, Renishaw, TT Electronics
Aberdeen Asian Income Fund Ltd., Arbuthnot Banking Group, Aviva, British Polythene Industries, Catlin Group Ltd., Communisis, Delcam, Fyffes, Hammerson, Hardy Oil & Gas, Howden Joinery Group, IMI, Kingspan Group, Old Mutual, Orogen Gold, Plant Health Care, Provident Financial, Skyepharma, Spirax-Sarco Engineering, TT Electronics, Tullett Prebon, William Hill
Eurasian Natural Resources Corp., Supergroup
FINAL DIVIDEND PAYMENT DATE
Ladbrokes, Novae Group, Schroders
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