Must read weekly preview: Imperial Brands, Jet2, JD Sports

Imperial Brands full-year – Tuesday 17 November

The full-year trading update in October should limit any major surprises at the final results. At that time, Imperial Brands (LSE:IMB) mostly maintained its previous guidance, aiming for low single digit growth in combustible net revenue, double digit growth in Next Generation Products (NGP) and for adjusted operating profit to rise by between 3% and 5% on the previous year. Free cash flow expectations were nudged up slightly to “more than” £2.2 billion, as compared to the previous “at least” £2.2 billion guide and the share buyback programme increased from £1.45 billion to £1.5 billion.

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Quite apart from the shifting landscape and the burden of regulatory censure which has plagued the sector over recent years, such as the planned UK government phased banning of combustible sales, there is also a reluctance among some investors to invest in tobacco companies at all on ethical grounds. As such, the tobacco companies have been racing towards NGP as an alternative, and are doing so from a relatively recent standing start.

Elsewhere, the tobacco majors continue to benefit from the extraordinary cash generation which their sector enables. Tobacco remains a product which has inelastic demand, providing the ability to raise prices without unduly dampening demand. This pricing mix has seen the benefit as a result, with falling volumes more than offset by robust pricing.

Cost savings of £320 million are planned out to 2030 and, as such, the group retains its ability to choose between shareholder returns, investment in the business, paying down debt or indeed all of these. At the present time, shareholder returns are in sharp focus, with the current £1.5 billion share buyback programme and a dividend yield of 5.7% adding to total returns for shareholders.

Changing lifestyle habits and tougher regulation perennially overhang this sector, but in the meantime Imperial Brands continues to play the cards it has been dealt carefully. The shares continue to be volatile given this landscape, as evidenced by a fall of 10% over the last year, although the price remains ahead by 65% over the last three years.

Jet2 half-year – Wednesday 18 November

Jet2  Ordinary Shares (LSE:JET2)’s latest trading update in early September will mean that expectations for the interim results will be flying high. It reported resilient summer bookings despite the Middle East conflict, with passenger numbers up 8.8% on the previous year and ahead of the 7.1% previously reported in July. However, elevated energy costs and the ongoing conflict have been stubborn headwinds.

Of course, the macro environment remains cloudy and the propensity of customers to book late will continue to provide challenges. More broadly, investing in airline shares generally has never been for the faint hearted. The ferocity of competition and economic pressure remain potential challenges, as do some of the other issues which have historically blighted the sector, such as virus outbreaks, industrial action, volcanic dust clouds and higher fuel costs. Current macroeconomic and geopolitical concerns add to a potentially dangerous mix, underlying some of the potential hazards of investing in the airline sector.

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However, and contrary to popular belief, Jet2 is no minnow. It is the third-largest airline in the UK behind British Airways and easyJet, ahead of TUI and Virgin Atlantic. The company has now decided to underline its £2.8 billion market cap size by switching from AIM to the FTSE250, which is likely to complete in December.

The share price reached its peak in June 2025, after which a profit warning in that September led to a decline of 20% as compared to today. Some of that fall has been softened by a 15% bounce in the price over the last year, much of which was a read across from the takeover bid for easyJet and the possibility of further M&A activity in the sector. It remains to be seen whether Jet2 can break out of the current holding pattern, although with a robust balance sheet and clear expansionary plans its intentions are evident.

JD Sports Fashion third quarter – Thursday 19 November

JD Sports Fashion (LSE:JD.)’s fortunes are long overdue a break, but its latest update in August missed such an opportunity by a fair margin. Several profit warnings last year put a lid on any share price appreciation, and August brought more pain for investors. The group reduced its adjusted pre-tax profit outlook for the full year to a range of £700-800 million, down from a previous £750-850 million, and in comparison to the £852 million recorded last year.

Its strategy remains intact, but the delivery is proving to be a stumbling block. Group sales are dominated by footwear (60% of the total) and apparel (30%), whereas by region North America (35%) and Europe (34%) are its largest markets. JD strengthened its presence in these countries with relatively recent purchases, namely the £900 million acquisition of US retailer Hibbett and a £450 million takeover of French company Courir.

However, second-quarter numbers made for difficult reading, with group like-for-like sales down by 3.1%, comprising falls in North America and Europe of 6.8% and 2.7% respectively, while the lesser contributing regions, the UK (26% of group sales) and Asia Pacific (5%) made some small progress with gains of 0.8% and 1.4%.

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Within the overall numbers, there was a glimmer of light for online sales, which rose by 2.6% over the period, while replica football kit sales in the UK were stronger given the World Cup competition. However, the situation in its largest market of North America is of some concern, where weaker consumer sentiment, deferring “back-to-school” demand from July into the first half of August, and the loss of brand heat at key supplier Nike all played a part.

More positively, Sportswear continues to take share within apparel due to rising participation in athletics, particularly among higher-income consumers who tend to have a greater propensity to spend regardless of the economic backdrop. The group has needed to sacrifice some margin with promotional activity of its own to stem the sales decline, although it has upgraded its e-commerce capabilities, improved its global supply chain and automated one of its larger distribution centres. Even so, the highly promotional market has required more concentrated spend, although this has shown some signs of limited success.

Overall, it seems that JD Sports remains between a rock and a hard place, with no obvious signs of the “tough” backdrop subsiding. While the shares have staged a 15% rebound over the last year, they remain down by 29% over the last three years and by 57% from the peak achieved in November 2021. An ongoing £200 million share buyback programme provides some support, and the valuation is undemanding compared to historic levels, but investors are approaching the stock with some well-worn caution.