Burberry investors are looking for signs of a change in sales
By Helen Reid
LONDON (Reuters) – Investors have high hopes that Burberry will begin to show signs of progress in the turnaround as the British luxury brand reports key holiday season sales this Friday.
Joshua Shulman, who took over as CEO six months ago, has vowed to rebuild the brand and regain lost market share in a difficult luxury market, focusing on products Burberry is best known for, such as trench coats.
Burberry shares have recovered more than 70% since hitting a 15-year low in early September, as investors believe pessimism around the brand has peaked and Schulman can revive sales.
Analysts expect Burberry to report a 12% decline in comparable sales in the quarter to the end of December, according to consensus estimates compiled by the company, up from a 20% decline reported for the six months to the end of September.
‘Focus on America’
U.S. consumers could help Burberry if it improves its visibility, something Shulman hinted at in his plans, telling investors in November that the brand has “a lot of focus on the U.S.,” where it has been relatively quiet.
Burberry’s pricing strategy reflects an expectation of stronger US demand. It has increased its price point by 115% in the US by November 2024, far more than in Italy or China, according to pricing data firm Luxurynsight.
Anna Farmborough, a portfolio manager at Ninety One in London, said American Schulman was “very excited” about the opportunities for Burberry in the United States, and said his strong relationship with department stores during his time as coach could help the brand. Gain more popularity.
“Burberry has never cracked America,” Farmborough said.
They won’t be alone, but luxury brands everywhere are hoping that tax cuts and a strong stock market will make more money for wealthy Americans to spend on designer fashion and expensive handbags.
Burberry’s new ad campaigns highlight its heritage beyond just bags and shoes.
Citi analyst Thomas Chauvet said Schulman’s failure to provide concrete mid- and long-term financial targets would give him time to rebuild the company.
