Tesco set to count the cost of US exit

ANNUAL results from supermarket giant Tesco will dominate another retail-heavy week, which will also feature figures from Burberry, Debenhams and JD Sports.

Tesco is expected to set out plans to retreat from Fresh & Easy, its ill-fated foray into the US, which has racked up losses of £850 million since its launch in California five years ago.

Chief executive Philip Clarke has been sounding out potential buyers for the operation, although a deal is unlikely to be finalised in time for Wednesday’s results.

The City consensus forecast is for a 10.6 per cent drop in pre-tax profits to £3.5 billion, and analysts at Shore Capital estimate it could cost Tesco some £250m to exit the US.

Tesco last month bought the 47-store Giraffe child-friendly restaurant chain for up to £50m in a move that will see it open the eateries across its UK stores.

Also on Wednesday, JD Sports Fashion is likely to reveal slow progress in its attempts to restructure the Blacks brand when it posts annual results.

The sports fashion chain bought outdoor goods retailer Blacks Leisure out of administration in early 2012, but the business endured a “disappointing” Christmas.

Analysts expect profits of £60.4m for the year to the end of January, down from £76m a year earlier.

Luxury goods group Burberry had a better-than-­expected festive season and will reveal how trading has fared since then.

The firm posted a 13 per cent hike in underlying revenues to £464m for the three months to 31 December, easing fears that China’s appetite for its luxury bags and coats may be on the wane.

Department store chain Debenhams will reveal the full impact of January’s snowstorms in half-year results on Thursday after it warned over profits last month.

Underlying sales slumped about 10 per cent between 14 and 27 January, compared with a 5 per cent rise over Christmas and New Year.

Profits for the six months to 2 March are expected to come in at around £120m, down from £128.5m a year earlier and short of City forecasts of about £131 million.

The group’s hopes for a rebound through its spring and summer ranges may also have been dashed by last month’s unseasonably chilly weather.