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Burberry shares in focus for investors on Thursday

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For a while, Burberry shares were were going perfectly in 2018. Overcoming an initial dip, one that took it from an opening price of £17.96 to a 13 month low of £14.82 by early February, the stock had rallied all the way to a record peak of £23.39 by the end of summer.

Yet since then things have unravelled rather abruptly.

From the start of September onwards the high end retailer has been haemorrhaging value, with some negative reports arising from a store visit by analysts, and the general nightmare that was October, causing Burberry shares to plunge below £17.

The share price has lifted off those lows, but is still a long, long way off its August highs, with Burberry shares now at a current trading price of £18.20.

Burberry trading update

It’s been a while since the firm’s last update, when it reported its first quarter results in July. And despite coming amidst its summer rise, they weren’t great.

Total retail revenue was up just £1 million year-on-year to £479 million, as ‘softer tourist demand’ – specifically big-spending Chinese tourists – relating to the stronger pound and euro hurt its performance in the UK and Europe.

Comparable sales, meanwhile, did jump 3%, however even that was lower than the 4% growth seen during Q1 2017.

As for Thursday’s half year figures, expectations aren’t high, with HSBC saying Burberry is looking at ‘relatively pedestrian’ growth in sales and earnings.

How forgiving investors will be is the question, given that the company’s new creative director Riccardo Tisci only launched his debut collection in September.

Burberry shares have a consensus rating of ‘Hold’ alongside an average target price of £20.16.

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This article is brought to you in association with Spreadex. All opinions expressed in this article are from the author and do not necessarily represent the opinions of The Armchair Trader. You can find out more about Spreadex products and services here, or find more articles from Connor Campbell here.

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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