Burberry Group (LON:BRBY) Releases Earnings Results

Burberry Group (LON:BRBY) posted its earnings results on Thursday. The company reported GBX 3.50 earnings per share (EPS) for the quarter, Digital Look Earnings reports. The firm had revenue of GBX 109.80 billion during the quarter. Burberry Group had a net margin of 0.87% and a return on equity of 2.29%.

Here are the key takeaways from Burberry Group’s conference call:

• First-half comparable retail sales rose 4% and revenue increased 6% to £1.1 billion. Adjusted operating profit more than tripled to £62 million from £19 million, with adjusted operating margin expanding 390 basis points to 5.7%.
• Gross margin increased 40 basis points, supported by stronger full-price sales, but also benefited from a one-off supply-chain rebate. Excluding that item, underlying gross margin was down approximately 10 basis points; Burberry expects expansion in the second half and full year.
• Wholesale revenue grew 17%, ahead of guidance, as partners reordered and expressed confidence in the brand. Outerwear grew by double digits, while growth also extended to leather goods and other product categories.
• Performance varied by region: the Americas grew 12% and Greater China 7%, while EMEIA declined 2%, reflecting weaker tourist activity and traffic, particularly in outlet stores. Management also acknowledged an uncertain luxury-market backdrop.
• Management said it expects further progress toward revenue growth and margin expansion, while remaining comfortable with the midpoint of analyst consensus. Cost discipline is expected to continue, with flat operating expenses targeted for FY 2027; the company also reported leverage improving to 1.7 times.

Burberry Group Stock Up 6.9%

LON BRBY traded up GBX 75.50 on Thursday, reaching GBX 1,168.50. The company had a trading volume of 253,360,313 shares, compared to its average volume of 22,123,787. The firm has a market capitalization of £4.19 billion, a PE ratio of 198.05, a P/E/G ratio of 1.66 and a beta of 0.70. Burberry Group has a 1 year low of GBX 953.40 and a 1 year high of GBX 1,376.50. The firm has a 50-day moving average of GBX 1,050.87 and a 200-day moving average of GBX 1,102.47. The company has a debt-to-equity ratio of 162.02, a current ratio of 1.87 and a quick ratio of 1.63.

Analysts Set New Price Targets

A number of research analysts have weighed in on BRBY shares. Jefferies Financial Group reaffirmed an “underperform” rating and set a GBX 940 price target on shares of Burberry Group in a research report on Thursday. Royal Bank Of Canada downgraded shares of Burberry Group to a “sector perform” rating and cut their target price for the company from GBX 1,400 to GBX 1,200 in a research note on Tuesday, September 22nd. Berenberg Bank restated a “hold” rating and set a GBX 1,080 target price on shares of Burberry Group in a report on Thursday, July 23rd. Finally, Citigroup reduced their target price on shares of Burberry Group from GBX 1,560 to GBX 1,510 and set a “buy” rating on the stock in a report on Wednesday, August 12th. Four investment analysts have rated the stock with a Buy rating, two have assigned a Hold rating and two have given a Sell rating to the company’s stock. According to data from MarketBeat.com, the stock presently has a consensus rating of “Hold” and a consensus price target of GBX 1,256.25.

About Burberry Group

Burberry Group plc, together with its subsidiaries, manufactures, retails, and wholesales luxury goods under the Burberry brand. The company operates in two segments, Retail/Wholesale and Licensing. It provides womenswear, menswear, childrenswear, beauty, eyewear, shoes, and accessories, as well as leather goods, such as bags. The company also licenses third parties to manufacture and distribute products using the Burberry trademarks. It sells its products through Burberry mainline stores, concessions, outlets, digital commerce, Burberry franchisees, department stores, and multi-brand specialty accounts, as well as through Burberry.com website.