Retail Detail... and Luxury (Raising M&S numbers, Pepco/Sonae results, H&M preview)

Research evidence excerpt

Retail Detail... and Luxury (Raising M&S numbers, Pepco/Sonae results, H&M preview)

ecast from +100bps to +90bps,

assuming a larger drag from higher markdowns related to the subdued consumer environment.

FX translation should be less of a drag on margins in 2Q than 1Q. Overall, we forecast 2Q EBIT of

SEK 6.1bn, with margins up 0.8ppts YoY. Our EPS estimates fall -2-4%. We reiterate UW with a

price target of SEK 150 (vs SEK 162 previously, indicating 8% potential downside.

Reeves drops food price cap proposal. UK Chancellor Reeves will not mention a proposal for a

voluntary price cap on food in her cost of living speech today, reported the FT yesterday

afternoon. This follows a UK treasury minister saying it was not considering a food price cap

yesterday morning, after the FT's report on Tuesday afternoon that the treasury was

considering offering grocers regulatory relief in exchange for a voluntary cap on basics. BoE

Governor Andrew Bailey told the Commons Treasury select committee yesterday that price caps

are not sustainable in the long run.

Sonae 1Q26 results. Sonae announced yesterday evening that its total revenue increased by

+7.1% to €2.7bn and underlying EBITDA increased by +17% to €255mn in 1Q26 ending March

with positive performance at all retail companies. Sales at Sonae MC (food retail unit) increased

by +8% YoY, with LFL growth roughly in-line and primarily driven by volume growth (c.3%) as

well as a positive mix effect from favourable Easter and promotional timing. Sonae MC’s

Underlying EBITDA rose to €162mn in 1Q (margin +0.5ppts YoY to 9.5%) supported by sales

growth and productivity gains, outpacing cost inflation. At Worten (consumer electronics retail),

LFL sales grew by +7.6% in 1Q, with growth in core categories (volumes +7%) and double-digit