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Someone on iii buletin board post this: http://tradingresearchpoint.co.uk/2013/01/23/sell-burberry-brby-bull-trap-island-top-targets-towards-1200p/ I bet Zak Mir & his buddy Anton Kreil from the Institute of Trading and Portofolio Management, short this stock...burnt their fingers.
there was rather better than expected newsflow from luxury goods group Burberry (BRBY). Any doubts over a possible slowdown in China and a consequential profits hit were quickly dispelled as the shares soared after the group reported a bumper Christmas sales period.
Burberry Group: UBS moves target price from 1170p to 1350p and reiterates a neutral rating. Credit Suisse ups target price from 1430p to 1550p, while staying with its outperform rating. Berenberg takes price target from 1400p to 1600p keeping a buy recommendation
Burberry: Bank of America raises target price from 1260p to 1470p and upgrades to buy.
Positive Points: Retail sales contributed three-quarters of group revenue in the period with strong growth seen in men's tailoring and men's accessories. The group already enjoys geographical diversity, an attribute which many retail rivals such as Marks & Spencer are currently attempting to emulate. During the period, Burberry opened seven further stores that included a new flagship store in Chicago. In November, Burberry announced it will directly operate fragrance and beauty categories from 1 April 2013. Management noted that "integrating fragrance and beauty is a significant brand and business opportunity." A progressive dividend policy continues to be pursued. The half year dividend was increased by 14% to 8 pence per share. At 31 December 2012, Burberry had 203 retail stores, 214 concessions, 50 outlets and 62 franchise stores.
Negative Points: "We expect the external global environment to remain challenging," declared CEO Angela Ahrendts. Wholesale revenue declined by 5%. For the second half of the year, Burberry now expects underlying wholesale revenue to be down to low to mid single-digit percentage year-on-year, reflecting lower sales to small speciality accounts in Europe. Burberry's results are exposed to changes in demand for luxury goods, which in turn is reliant on the overall health of the economic environment, and consumer confidence. Large proportions of Burberry's sales are related to tourism and are therefore exposed to changes in international tourist flows. The Burberry brand appeal could fade.
Financial Highlights: Total group revenue grew by 9% to £613 million. Retail revenue increased by 13% to £464 million. Wholesale revenues declined 5% to £120 million. Licensing revenue in the third quarter increased by 4%.
Third Quarter trading update: Burberry benefits from strong run up to Christmas. Today's share price hike in early trade has restored Burberry to its September levels, when its profit warning hammered the stock. The update has comfortably beaten estimates, and various updates from the company since September's shock have done much to reassure investors. In particular, strong retail growth was achieved through lines such as men's tailoring and accessories, with the approach to Christmas being very successful. Burberry is also continuing to eye productivity, as well as driving new growth strategies, such as digital innovation and non-apparel sales growth. On the downside, the fragility of fashion - both in terms of the consumer and investors - was amply demonstrated in September's share price fall, whilst the general economic environment is an ongoing challenge. Prior to today, the shares had shown real signs of recovery, having risen 18% in the last three months, as compared to a 5% hike for the wider FTSE100. Over the last year the performance was more pedestrian, Burberry having added 4% and the FTSE 8%. Nonetheless, the recent market consensus upgrade of the shares to a buy seems to have been vindicated by this statement.
here we go...
Fashion retailer Burberry looks set to unveil a healthy third-quarter trading update despite a challenging end to 2012. The luxury clothing label's shares have recovered steadily since a sharp fall of around 27% in the week following the firm's second-quarter sales update in September. Shares were up 1% to 1,318.00p at 15:40 Monday, showing that it was perhaps oversold in the ensuing chaos. The modest hike in shares followed Deutsche Bank's report earlier in the day. For the three months to the end of September (second quarter), Burberry reported that Retail like-for-like (LFL) sales rose by 1%. However, Deutsche Bank said that 3% LFL growth in the third quarter could be achievable "given slightly weaker comparatives and industry evidence of improving trends in China".
The intense volatility that has started to accompany trading updates at luxury goods giant Burberry (BRBY) has resulted from uncertainly over prospects for the key China market and whether the threat of an economic slowdown here might hurt profitability. So far the near 30% share price recovery from October support around £10 suggests that the market is counting on a soft landing in China rather than a hard one. Indeed, this alone implies ongoing uncertainty over Burberry's prospects in 2013, and given the three-month rebound in the stock, something quite special would have to materialise to deliver much further upside.
Following last week's Burberry management roadshow in New York, Credit Suisse has maintained its 'outperform' rating and 1,430p target price for the luxury brand group. The broker said that the meeting "reinforced our belief that Burberry's brand elevation and leading digital media story remains intact".
Burberry Group: Morgan Stanley downgrades to equal-weight, while the target price of 1300p remains unchanged.
you would think that with all the directors buying and selling they would hold some shares, but LSE does not show that...
The interim dividend was raised by 14% from 7.0p to 8.0p per share. Net cash improved to £237m, from £174m at the same point lat year.
Revenue figures were already widely known after last month's pre-close trading update. Underlying revenues grew 8% to £883m, up 6% on a reported basis, while Retail revenues rose 10% underlying to £577m, up 9% on a reported basis. "In retail/wholesale, which accounts for over 90% of our business, Burberry delivered 7% revenue growth, 11% profit growth and a further improvement in operating margin, all in a challenging external environment. Our five key strategies remain highly relevant and we continue to invest in our retail, digital and technology growth initiatives," said Chief Executive Officer Angela Ahrendts. "Integrating fragrance and beauty is a significant brand and business opportunity. Our global teams are excited to partner with long-standing distributors, suppliers and customers to optimise these under-penetrated categories. One consistent brand expression, leveraged across all categories, will underpin future growth in the Beauty division and our existing core business."
Luxury brand Burberry reported a higher-than-expected profit in the first half and said it is looking optimistic about its new fragrance and beauty division which is to start operating next year. Adjusted profit before tax (PBT) gained 6% to £173m during the six months to September 30th, up 7% on a reported basis. Consensus estimates were for £167m. However, on a reported basis, PBT dropped from £159m to £112m due to exceptional items including a £73.8m charge relating to the termination of the fragrance and beauty licence relationship with French firm Interparfums (2011: nil). The fragrance and beauty divisions are to be directly operated as a fifth production division, Burberry Beauty, from April 1st 2013, which Burberry said represents a "significant opportunity in under-penetrated opening price point categories". The company's other four divisions are accessories, womens, mens and childrens apparel. The company said: "The ongoing strategy of greater brand control and integrating fragrance and beauty will enable Burberry to capitalise on the significant growth opportunities in these key opening price point product categories, where Burberry is under-penetrated compared to peers."
Positive Points: Half year profitability before exceptional items exceeded the consensus analyst forecast. Management noted that "in retail/wholesale, which accounts for over 90% of our business, Burberry delivered 7% revenue growth, 11% profit growth and a further improvement in operating margin, all in a challenging external environment." The board continued to outline a number of growth strategies going forward, including digital innovation, non-apparel product sales growth, Retail investment focused on flagship markets (new stores in Hong Kong, Milan, Rome and London) and an Emerging Markets focus - 62 franchise stores in 27 countries worldwide. The generation of profits at the lower end of prior analyst forecasts for the full year would still see a gain in profits being made compared to last year. The group already enjoys geographical diversity, an attribute which many retail rivals such as Marks & Spencer are currently attempting to emulate. Burberry announced it will directly operate fragrance and beauty categories from 1 April 2013. Management noted that "integrating fragrance and beauty is a significant brand and business opportunity." A progressive dividend policy continues to be pursued. The half year dividend was increased by 14% to 8 pence per share.
Negative Points: Reported revenue growth for the group's Retail operations slowed from 14% in the first quarter to 6% in the second quarter. Comparable store sales in China were still positive but slowed in the second quarter, driven primarily by lower traffic. Footfall in London decelerated in the second quarter, in part due to the disruption from the Olympics, impacting both tourist and domestic customers. In the Americas, comparable Retail store sales growth was modest reflecting tough prior year comparatives, a more domestic customer base than other regions and greater exposure to the rationalisation of certain opening price point products in core accessories and outerwear. Licensing revenue fell by 5% on an underlying basis. The business represents 6% of group revenue (2011: 6%); of which approximately two-thirds comes from Japan. Management has recently taken steps to protect the group's long term luxury brand status, axing cheaper fashion lines in order to buoy prices. Cheaper handbags, made in Asia were reduced. Coats made from fabrics woven at Burberry's own mills in Yorkshire were increased. The lowest price for a trenchcoat has risen to about £1,000. Burberry's results are exposed to changes in demand for luxury goods, which in turn is reliant on the overall health of the economic environment, and consumer confidence. The Burberry brand's appeal could fade.
Financial Highlights: Total group revenue grew by 6% to £883 million. Retail revenue increased by 9% to £577 million. Adjusted profit before tax rose by 7% to £173 million. Reported profit before tax and including exceptional items declined to £112 million (2011: £159m). Net cash of £237 million. The half year dividend increased by 14% to 8 pence.
Half year results: Burberry surpasses expectations. In the wake of a surprise downgrade to profit guidance by management, profitability at the interim stage surpassed expectations. Adjusted profit before taking into account exceptional items came in at £173 million, up 7% and ahead of a consensus analyst forecast of £167 million. Pre-tax profit including exceptional items declined by 29.5% to £112 million. A charge of £73.8 million was taken in relation to the group's termination of its existing fragrance and beauty licence relationship. Adjusted operating profit margin for the group’s core Retail/Wholesale business rose by 0.6% to 15.5%. Management highlighted its drive of productivity, through an intense focus on innovative product, merchandising and marketing initiatives, while optimising efficiency and tightly controlling expenses. In all, Burberry appears to have largely restored investor confidence following an earlier lowering of full year earnings guidance. Management looks to be underlining its confidence for the future via a hike to the dividend payment (+14%), with comparable store sales in China still positive in the half year, although having slowed in the second quarter.
Company overview Burberry Group PLC is a British luxury fashion house, manufacturing clothing and fashion accessories. Its distinctive tartan pattern has become one of its most widely copied trademarks. The company has branded stores and franchises around the world and also sells through concessions in third-party stores. It runs a catalogue business and has a fragrance line. HM Queen Elizabeth II and HRH, the Prince of Wales have granted the company Royal Warrants. Burberry's trademark products are its fashionable handbags and exclusive fragrances. Burberry is quoted on the London Stock Exchange and is a constituent of the FTSE 100 Index.
Seymour Pierce has reiterated its 'buy' rating and 1,500p target price for luxury brand Burberry after a better-than-expected first half. Burberry reported a 6% growth in underlying profit before tax (PBT) to £173m, ahead of Seymour's £165m forecast. Meanwhile, the dividend was raised by 14% which shows "management's confidence in future growth," according to analyst Kate Calvert. "This is a reassuring set of results and will help rebuild sentiment towards the shares after its unscheduled trading update in September. This came after a dramatic sales slow down in the industry, which then recovered towards the end of September," Calvert said. "The market will welcome the news that bringing the fragrance and beauty license in-house will be broadly neutral to PBT in FY14, according to management, and earnings enhancing thereafter." Seymour Pierce now thinks that these figures mean that there is upward pressure to its own £390m full-year PBT forecast and consensus estimate of £400m. "On our current numbers, the shares are trading [at 16.1 times full-year earnings] which we believe is undemanding for its long term growth prospects. [...] We still consider Burberry a strong long term growth story with significant geographical and product mix opportunities."
Seymour Pierce has reiterated its 'buy' rating and 1,500p target price for luxury brand Burberry after a better-than-expected first half. "On our current numbers, the shares are trading [at 16.1 times full-year earnings] which we believe is undemanding for its long term growth prospects. [...] We still consider Burberry a strong long term growth story with significant geographical and product mix opportunities," analyst Kate Calvert said.
Burberry: Seymour Pierce keeps buy rating and 1,500p target; Morgan Stanley ups target from 1,240p to 1,420p, overweight rating kept.