The latest trading statement from J Sainsbury (LSE: SBRY) is scheduled for next week (Wednesday, 9 November). And if September's release is anything to go by, investors may wish to consider giving the struggling supermarket short shrift.
The London business saw like-for-like sales decline 1.1% during the 16 weeks to 16 September, announced last time around, indicating yet another top-line revenues -- underlying till rolls fell 0.8% in the prior three-month period.
Recent updates from Tesco and Morrisons have suggested that the established 'Big 4' retailers may finally be getting to grips with the discount retailers. But investors have witnessed modest sales recoveries before, only for the growing allure of Aldi and Lidl to pull customers out of the Big 4's doors once again.
Sainsbury's has enjoyed a solid share price bump in recent weeks, the company recently dealing at six-month peaks, resulting in a forward P/E ratio of 12.4 times.
Whilst that's cheap compared to the FTSE 100 (INDEXFTSE: UKX) average of 15 times, I don't think this figure represents particularly good value, given the grocer's poor growth outlook. Indeed, the City expects Sainsbury's to suffer a 10% earnings fall in the year to March 2017 -- the third consecutive fall, if it happens.
Sainsbury's chief executive Mike Coupe advised in September that "we expect the market to remain competitive and the effect of the devaluation of sterling remains unclear."
And given the likelihood of enduring margin pressure, as the need to keep slashing prices and soak up rising product costs continues, I reckon the supermarkets could be in line for a fresh stock price re-rating.
Bag a beauty
Fashion play Burberry (LSE: BRBY) is also due to release its next trading statement this coming Wednesday. But unlike Sainsbury's, I believe the luxury stock's long-term earnings outlook is on a much sounder footing.
Burberry released a much more reassuring trading update last month, the catwalk colossus advising that underlying revenues ticked 2% higher during April-September, to £859m. This indicates a pick-up in demand more recently -- indeed, underlying sales remained flat during the first quarter, at £423m.
Next week's release is likely to indicate further pressures in key marketplaces like Hong Kong and Macau, regions where macroeconomic turbulence continues to take its toll on sales of luxury goods.
But Burberry is also likely to mention the growing success of its digital ooedperations -- e-commerce sales grew across all three of its major regions in the first half, it announced in October -- as well as a positive reception to its newly-launched products like its Bridle and Buckle bags.
The number crunchers expect Burberry to enjoy a 7% earnings bounce in the current year alone, resulting in a P/E rating of 18.7 times.
Sure, this figure may peek above the London blue-chip average. But I reckon the tremendous pulling power of its prestigious fashions the world over makes Burberry a standout growth pick for long-term investors.
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Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Burberry. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.