Burberry

Note: This is a daily stock update and the information stands true as of 24/01/25, 09:00 CET.
Company Update:
Following Richemont's stellar publication last week, Burberry reported a better-than-expected sales decline during the holiday season.

For Q3 24/25 (Oct–Dec 2024), retail comparable sales contracted by only 4%, outperforming the consensus estimate of -13% YoY. All regions reported less severe declines than anticipated, with the Americas even returning to positive growth of 4%, rebounding from a double-digit decline in H1.

Asia: -9% YoY (vs. consensus of -20% YoY)/Mainland China: -7% (vs. consensus of -19%)
EMEIA: -2% (vs. -4%)
Americas: +4% (vs. -9%)

Burberry expressed confidence in its strategic plan to refocus on its core business, aiming to enhance performance and strengthen brand appeal. The company now expects H2 results to broadly offset the H1 adjusted operating loss (£41m), a development likely to be well-received by the market.

Expert Opinion:
We plan to revise our estimates upward. Following Richemont's stellar results, the luxury sector is poised for continued share price performance, with the challenges of Q3 2024 now behind us. However, given the significant rally in luxury stocks since Q3 2024, coupled with elevated valuations, further share price increases may be more gradual. We continue to favor ultra-luxury brands like Hermès, LVMH, and Richemont over turnaround stories.