Next week on the stock market

Dr. Martens’ shareholders are nursing heavy losses, and weakness in the US, its biggest market, continues to be a concern. The recent trading update suggests that we shouldn’t see too much divergence from consensus forecasts which expect revenue to fall by 11% to under £0.9bn. That’s largely driven by expected weakness in the wholesale division. Analysts are looking for operating profit of £125mn, which would mark a fall of 34%.

The iconic bootmaker has outlined several challenges for this year. It’s anticipating another double digit decline in US wholesale revenue. The decision to hold back on price increases means the company will be unable to offset inflation. Dr. Martens sees a potential two-thirds fall in pre-tax profits as the worst-case scenario, but has not ruled out the possibility of an improvement. We’ll be watching out for further guidance.

Pets at Home has shown that even it isn’t immune to a challenging consumer environment. Downgraded profit guidance following a weak third quarter didn’t come as much of a surprise to investors, as inflationary pressures caused consumers to rein in their spending on more lucrative pet accessories.

Having largely shaken off the disappointment of slowing retail growth, investors will be hoping to be rewarded for their patience. In addition to looking for underlying profit before tax (PBT) of £132mn, markets will be eagerly awaiting forward-looking guidance. Utilising customer data insights and growing its online presence offer significant opportunities for growth, but these efforts don’t come cheap. We are mindful that the group’s costs are growing and will be paying close attention to how investments will be sustainably funded.

After a year of getting fit, Salesforce is a leaner beast ahead of first-quarter earnings margin progression last year was impressive, and guidance points to further improvements over the coming year. But without as many cost-cutting levers to pull, margin growth will need to come organically.

The macro-environment looks to have stabilised, and investors will now be looking for signs that subscription revenue growth can reaccelerate from the current c.10% guidance. AI will play a major part in that, and Salesforce is well-positioned to benefit given the amount of time customers spend on Slack or its various other cloud products. But with its Copilot tool still in beta mode and no benefit built into guidance for the coming year, it may take some time for AI to meaningfully drive top-line growth.