Next week on the stock market

Carnival has faced several obstacles in the first half of the year. Namely the temporary closure of its Baltimore port after a cargo ship collided with a bridge, and the conflict in the Red Sea. But at the last check, record demand and bookings meant that it was on track to meet 2024 guidance for underlying cash profit (EBITDA) of $5.6bn.

Prices have been trending higher and Carnival’s guided for a further increase in profitability when it reports second quarter earnings next week. Given the strong booking position for the rest of 2024, we’re not expecting any major surprises and will be looking for any clues as to how next year is shaping up.

The second quarter tends to be the strongest in terms of cash generation, so we will keep an eye on whether Carnival’s managed to put a dent in its net debt pile, which totalled $28.5bn at the end of February.

Back in February, Halfords issued its second profit warning in as many years, citing a “material weakening” in three of its four core segments: Cycling, Retail Motoring and Consumer Tyres. Markets are now expecting a pre-tax profit of around £36mn, over 25% lower than previous guidance.

Halfords aims to roughly double its profits over the medium term, but with the group remaining cautious about short-term market recovery, this goal won't be without challenges. The company hopes that the growth of its service focused business will be the catalyst for change. Its Motoring Loyalty Club, with over 3mn members, is gaining momentum and has the potential to improve customer retention and create a more resilient, lower risk business.

Currys’ performance has been underwhelming in recent times, but there are signs that headwinds are easing. Consumers have struggled to justify upgrading appliances, with demand for small electrical goods being particularly affected. But with the green shoots of a recovery in UK discretionary spending, even a partial return to the longer-term growth trend could significantly benefit the group.

The Nordics are also showing signs of life, sharing in the group’s 2% like-for-like growth in the final quarter. Full year underlying operating profit is expected to exceed consensus estimates, with sales growing and margins benefiting from higher customer adoption of solutions and services.

After selling its Greek operations, Currys has entered the new year as a leaner business. It’s expected that some of the funds from the sale will be used to pay down debt, which have historically weighed on sentiment. We will be looking for guidance on how an improved balance sheet will translate into capital investment and margin growth in the current year.