Despite a small dip in like-for-likes, wine retailer Majestic delivers a 3.9% jump in pre-tax profit in its half year to October 1. Retail Week finds out how the analysts have reacted.

“We expect the shares are likely to weaken today with consensus forecasts falling around 3-5%. Whilst it is difficult to see an immediate positive catalyst we feel investors need to look into the second half for a more positive outlook.”

“Firstly, the group is going to spend a further £250k in advertising in the second half which compares to a £750k spend last year in the second half. Secondly, the maturing of 15% of the estate coupled with the 6-8 new stores opened in the first half should help support full year numbers.”

Wayne Brown, Canaccord Genuity

“Majestic has decided to reduce sales in the wholesale channel; long term, we see this as strategically positive, but it will subdue progress nearer-term. Primarily due to this, we reduce pre-tax profit forecasts, by 2%, 5% and 7% in the full years ending 2013 to 2015.”

Bethany Hocking, Investec

“While the like-for-like performance is unsurprising, given the poor summer for BBQs and other outdoor events, the total sales decline is a surprise. This is due to reduced involvement in the wholesale drinks market leading to £7.1m lower sales in this category.

“The key Christmas trading period is still to come, but the current run-rate is below our 2% full year like-for-like estimate. Our full year 2013 pre-tax profit estimate of £25m is broadly in line with consensus expectations. Majestic has relatively low operational gearing, but it feels like there is some modest downside risk to consensus.”

Sanjay Vidyarthi, Espirito Santo