Ryanair, Wizz Air face a bumpy summer: EMEA earnings week ahead

Ryanair Holdings Plc and Wizz Air Holdings Plc cap off an earnings season that has so far seen more than half of companies tracked by Bloomberg Intelligence beat estimates.

Low-budget airlines benefited from Easter falling early this year. They now face scheduling and pricing challenges as the summer season approaches, leaving sector shares trailing other stocks.

Retailers will also come to the fore next week as UK food and clothing chain Marks & Spencer Group Plc and Polish e-commerce group Allegro.eu SA prepare to report. British home improvement specialist Kingfisher Plc is poised to benefit from economic recovery in its two biggest markets, while power generator SSE Plc may have seen margins shrink for its thermal and gas storage units.

Swiss wealth management firm Julius Baer Group Ltd. completes the lineup.

This is the last week-ahead fixture in the current reporting season. We will resume coverage in July.

Highlights to look out for:

Monday: Ryanair’s (RYA ID) revenue probably jumped 24% in the year ended March 31, overcoming delayed Boeing deliveries and scuffles with third-party online travel agents. Plane groundings at rival Wizz Air may have also lent a hand. Annual adjusted net income is seen up 33%, although the net loss probably swelled in the fourth quarter, seasonally the company’s weakest, consensus shows. The Boeing delays could rumple summer schedules, BI said.

Tuesday: Kingfisher’s (KGF LN) first-quarter revenue may have slipped year on year but likely recovered sequentially as French DIY trends turned in its favor. The home improvement company is poised to benefit from economic recovery in its two biggest markets, France and the UK, as consumer sentiment and real wage growth improve, HSBC analysts said. The restructuring of Castorama and the rollout of Screwfix in France should soon feed through to operating profit, they said.

Wednesday: Marks & Spencer (MKS LN), whose competitive pricing strategy has been driving volume gains, may need a new catalyst to spur faster earnings growth, according to BI’s Charles Allen. Adjusted pretax income likely grew 42% in fiscal 2024 but may only increase 6% in 2025, consensus shows. Margin recovery in the Clothing and Home segment could be held back until stores are rejigged, while the benefit of rivals closing may be fading.

• SSE’s (SSE LN) full-year adjusted operating income is expected to have fallen 7.4%, dragged down by its thermal generation and gas storage divisions, consensus shows. Receding margins in those segments could partly offset the earnings boost expected next fiscal year from the delivery of two wind projects, according to BI’s Joao Martins. SSE’s networks and renewables segments could shine over the next decade as the company invests in supporting the UK’s energy transition, Berenberg analysts said.

Thursday: While peak Easter travel should have helped Wizz Air (WIZZ LN) meet its 2024 revenue per available seat kilometer target, the grounding of 45 of its planes at the end of March could hamper summer bookings. The budget airline will have to maintain pricing power to help mitigate the financial hit, BI’s Conroy Gaynor said.

• A slight pickup in flows is in the cards for Julius Baer (BAER SW), which hit the reset button after getting whipped by the collapse of Austrian real estate tycoon Rene Benko’s empire in recent months. While strong equity markets point to better brokerage margins, don’t expect blowout results, given uncertainty about rate cuts and deleveraging linked to the Asia-Pacific region and China, analysts at Morgan Stanley said.
• Allegro’s (ALE PW) gross merchandise value is expected to have risen 8.6%, while adjusted Ebitda is seen up 22%, in line with the company’s guidance for the quarter. Watch for signs of growth acceleration amid expectations that rapidly rising wages will encourage Poles to spend more. InPost, Allegro’s main logistics partner, pointed to higher parcel volumes in Poland in its earnings report on Wednesday. Prospects for Allegro’s expansion in eastern Europe are also of interest as losses at its Czech unit mount.