CONSUMER CYCLICALS: € consumer & transport earnings ahead

Vol ahead on VF and Avis, concern for Lufthansa levels while there may be opportunities on Finnair & Pluxee.
Full list of earnings of interest;

• VF; will follow up separately but it will be the trade-off between gross margin improvements (small) and SG&A increases netting out on the magnitude of the operating margin fall. Sequential growth is expected and carries less weight into the seasonally stronger 2H (CY),
• Lufthansa; has broken a trend by not giving a profit warning which we (and likely markets) are hoping translates into no cuts to already rough FY guidance; EBIT €1.4-1.8b (-40%yoy at midpoint) & FCF "well below" €1b. Focus is on ex. fuel costs. On fuel it was an already high 82% hedged for this year leaving less tailwind there than peers.
• Kesko; new entry in local markets and brought impressive margins on its franchising model. It's not having a great year with mid-point of FY EBIT guidance -9%. The new 30s are struggling to perform (+4) despite giving a 12bp NIC. Hard to see what the catalyst might be in this earnings but we are interested nonetheless.
• Woolworths; any updates on potential regulation impact as it fights the Aus. competition body in court (alongside duopoly peer, Coles). Both are facing allegations they mislead consumers on pricing and has followed public and political backlash on their stellar margins/profits during inflation/'cost-of-living crisis'.
• Elis; an expansion to the US through an acquisition was called off last month. Standalone performance has been fine, so we are more interested in where it leaves it's M&A/BS appetite. It is a rising star, FY guidance is for sales growth of +5.2-5.5% on EBITDA margin of 35.2-.5%.
• Pluxee; any numeric impact tagged to potential Italian regulation changes (similar to what Edenred provided). Also interested in standalone performance given width curve is giving. Some insight into M&A strategy would be interesting given the large firepower/BS headroom it has yet to deploy. FY guidance is +18% revenue growth on a >35% EBITDA margin.
• Carlsberg; While we are waiting for the Britvic acquisition to close and associated supply (~€2.2b cash short-fall, full debt funding) worth keeping an eye on standalone performance. FY guidance is for EBIT growth of +4-6%.
• Altria; US only means suspectable to continued slowdown in combustibles market there; double digit volume declines 1H were not offset by pricing - when combined with a only low-teens exposure to non-combustibles left 1H earnings in contraction. Guidance is for that to turnaround in 2H.
• Avis; no such thing as low vol earnings, Co's cap. allocation limits upside to credit and in-line with that € bonds have been left wide. We do think Moody's is tad too high on this years margin expectations (EBT of 7.5%) - but we don't think missing on that itself will bring about rating action.
• CMA CGM; an interesting name that is spread wide for ratings - likely a shadow cast by its history (went to CCC in 2020). It is not a rising star (targets double-BB corridor) and private co that seems to report quarterly's publicly. No FY guidance.
• Avolta; a firm name that is riding organic growth in air-traffic. Any interest to move into IG would be nice to see, but not expected.