That's it, I'm done -- for right or wrong I've taken about a 60% gain here and happy to let any upside ride.
I really think the CEO's statement yesterday wrong footed the company and I wouldn't be surprised if it had something to do with Bailey deciding to leave.
The new CEO's strategy looks like a big mistake -- the strive for such high price/margins are what almost knocked Mulberry off course until they fired the CEO and reverted back to a more broader market appeal.
I think I might exit the 2nd half of my investment here on a decent rebound, as longer term this could be damaging.
Revenue +4% underlying, +9% reported with retail comp store sales +4%
· Adjusted operating margin up 210bps to 14.6% benefiting from phasing and a significant improvement in Beauty profitability
· Strong free cash flow £171m (H1 2017: £75m), cash conversion 117%
· £191m of share buyback completed; total of £350m to be completed in FY 2018
· Fashion and newness resonated well, with strength in rainwear and leather goods
· Conversion improved in all regions led by returning top spending customers
· Direct-to-consumer digital revenue grew in all regions led by growth of mobile
· Delivered £20m incremental cost savings; cumulative now £40m
o Accelerated and expanded programme to deliver cumulative savings of £60m in FY 2018, £100m in FY 2019 and £120m annualised in FY 2020
· Burberry Business Services opened in October
· Beauty transitioned to strategic partnership with Coty on 2 October, as planned
· Third consecutive year of inclusion in the Dow Jones Sustainability Index
"I am pleased with our performance in the half with strong double-digit underlying profit growth. Consumers responded positively to fashion and newness, particularly in rainwear and leather goods. Digital revenue grew in all regions, led by mobile, while growth was strongest in our own stores in Asia Pacific. I look forward to building on our strong foundations as we implement our strategy to drive Burberry forward."
Marco Gobbetti, Chief Executive Officer
BRBY Burberry , bullish top triangle formed. Luxury goods tend to be of Inelastic Demand, eg, does Victoria Beckham care about the cost of Living.😯 not a chance.
Forward P/E of 19.6 historically very cheap. Interims Nov 10th.
<b><u>Burberry Group director deals</u></b>
Date Director Type Volume / price Trade value
09 Aug 17 Carolyn McCall Buy 40 @ 1784.97 £713.99
09 Aug 17 Ian Carter Buy 581 @ 1784.97 £10,370.68
09 Aug 17 Christoper Bailey Buy 8,784 @ 1784.97 £156,791.76
"Burberry has given me a textbook tradeI last covered this share on April 10 and noted that the bull phase I had forecast previously was still in force and my first target at Â£17 had been achieved. This is where I decided to take some profits off ..."
"After PAR:MC:LVMH, the world's largest luxury goods group, reported flashy results last week, investor expectations for LSE:BRBY:Burberry's second-half update were high. As it turned out, they were too high.It's why investors bailed out of ..."
"Burberry remains in fashion for investors and hits my targetThe fashion chain LSE:BRBY:Burberry is one of the top names in British design. For many overseas buyers, it is a must-have name for in your wardrobe (or to carry the bag to show off when ..."
"FTSE is going exponential - until TuesdayOn Friday, the @GB:UKX:FTSE 100 closed higher on the day. Nothing extraordinary about that, since we have been inured to seeing a rising index for some time. But what is extraordinary is the 12-day run ..."
It's cheap - despite the short term hiccups, it has no debt, £500 million in the bank, no significant pension exposure and a return on capital to die for.
I bought a load when it hit the bottom and added several times on the way up
Burberry became the 73rd biggest world brand last year and I'd be sad to see it fall into the hands of Coach.
Underlying sales from Burberry's wholesale segment (excluding currency translation impact) declined 14% during the half-year to 30 September. Though they did expect a 10% drop, clearly investors weren't too happy, with the share price dropping 9% on the news.
Struggling industry and no major strategic initiatives from company to fuel growth. Don't see valuation getting any better in short to medium term future.
However, new CEO and significant rollback in discretionary spending seem like good signs. What are people's thoughts on Burberry long term?
"Nick Train, the fund manager of LSE:FGT:Finsbury Growth and Income trust, has told investors to be fully invested in equities, warning them to remember that "the economy is not the same as the stockmarket".In his latest podcast, the manager of ..."
" 'sector perform' from 'underperform' and lifted the price target to 1,400p from 1,200p "
What a bunch of clowns, wait for the stock to hit your upper limit and then tip it.
Clever, very clever.
Games -- ignore all these "experts" and just bag this for the long term -- they have 100 years history and £1/2 Billion in the bank, no debt --- what could possibly go wrong -- quote from a gentleman at Austin Reed !!
"RBC Capital Markets upgraded Burberry to 'sector perform' from 'underperform' and lifted the price target to 1,400p from 1,200p as it upped its earnings per share forecasts, largely due to a bigger FX tailwind.
The bank said Burberry's equity story is now centred on driving retail productivity in a modest growth environment and leveraging its digital edge to expand into e-commerce.
"FY17 should be difficult but GBP weakness provides a welcome breathing room. We see Burberry moving faster than peers to adapt to millennial consumer behaviour changes and recent management shake-up should support the stock into next year."
The Canadian bank reckons consensus expectations of retail comps - up 1% for the second quarter - look achievable following comments from several peers pointing to sequential improvement in July to August.
Strength in the UK may help to offset weakness in Continental Europe while improving trends in China may mitigate recent price cuts in Asia, RBC said.
In addition, it said the announcement of Marco Gobetti as Burberrry's new CEO was a game changer, changing a management set-up that was not ideal in the current demand environment.
"Mr Gobetti is regarded as a strong retail operator who turned around Givenchy and Celine at LVMH. His arrival should allow Mr Bailey to focus on his chief creative officer role and do what he does best. It is difficult to be negative on Burberry shares ahead of Mr Gobetti's arrival when we examine other management shake-up stories in the retail & consumer sectors."
Just thinking about the pricing policy and how much this has changed over time.
Given that Burberry has been punching out trench coats for over a 100 years I thought this one would be a useful one to compare.
This is current on the web site today, a standard cotton constructed trench coat costing £1,395 which I must admit caught me off guard, I had no idea they were quite this expensive :-
If you look at the average salary today at £26K this represents 5.5% of the average. I realise that people on average salary are less likely to be forking out £1,395 on one coat, but it's a useful yardstick.
What would this ratio have been 10 years ago, and 25,50,75,100 years ago?
One thing that knocked Mulberry off it's perch was that the merchandise became just too expensive, where do we think Burberry is right now?
Is it the pricing of the economy that's at fault for the recent dip in sales I wonder?
Nick Train is a huge fan of Burberry having bought more and more in 2014 and 15 -- he could have waited of course but there you go.
Here is an article on this if you are interested :-
"With the Chinese economy slowly pressing the brakes, LSE:BRBY:Burberry has turned from one of the strongest and fastest-growing luxury brands to one where profit is in decline.Given there's little sign of business picking up soon, it's launched a ..."
This petition was stalled in parliament since 12th Aug 15; finally green lit on 12th feb 2016.
The FCA don't even reply on the matter, now is your chance to have your say.
If you hate seeing buys reported as sells etc!!!!!!
Has already been sent to Martin Lewis, Daily Mail, Moneyweek & Watchdog.
My local MP supported this petition by writing to the petitions committee to help un-stall it.
Theres 650 MPs in Westminster, So have you written to your MP? 649 to go!
If this petition doesnt reach 10,000; then imo we might as well have not bothered as it will almost certainly be filed B1N; @ 10,000 the government should respond. We are currently getting approx. 100 new signatures a week, but need 3x that amount to reach the target with only 15 weeks to go.
At 5000 I will send this to the PM & the chancellor as well as my MP again.
So If you havent yet signed or indeed have but havent passed it on to others, then nows the time to do so. If each person who has signed can get just one other person to sign then we will double the total immediately. I have posted to all aim listed gas n oilies, currently doing the footsy 100. But I can only do so much to push this. Really need you guys & gals to help. Thanks to all who have signed so far.
We really need a social / media savvy individual to help generate more interest in this.
.. perhaps being too pessimistic, with a target of 800p.
"The Questor Column:
Sell Burberry as sales outlook worsens:
Burberry shares fell 5% lower as the second half trading update did little to quash investors fears that the rapid growth in sales across Asia are now going into reverse. Asian markets and in particular Hong Kong and China are incredibly important for Burberry as they contribute 30% to 40% of the total revenue.
There are clearly problems in these regions as like-for-like sales in Hong Kong fell by 20% for the third quarter in a row. The company added that sales are still growing in Mainland China and Korea, but the picture for total retail sales is getting worse. Like-for-like retail sales were down 2% to £1.06 billion in the six months to the end of March. The retail sales performance marks a sharp reversal from 9% growth in the same period last year. Burberrys wholesale division also declined, by 1% to £330 million during the second half. Licensed products, such as glasses and watches, more than halved from a year earlier to £16 million, in the second half. The fashion group flagged that it doesnt except a recovery in wholesale demand any time soon, with uneven buying from big U.S. customers. Wholesale revenues are expected to fall 10% during the next six months.
Questor thinks Burberry shares should be trading on 12 times earnings. Market consensus for £427 million in pretax profits giving 73p in earnings per share also looks fanciful. A more prudent target would be pretax profits of around £330 million giving about 65p in earnings per share and a target price of 800p.
· Comparable sales down 2% (Q3: unchanged; Q4: down 5%)
- Up 1% excluding Hong Kong and Macau in H2
- Growth continued in mainland China, Korea and Japan
- Sales to travelling luxury customers slowed in Continental Europe
- US domestic demand remained uneven
· Wholesale revenue £330m, down 1% underlying, in line with guidance
· Licensing revenue down to £16m underlying, consistent with full year guidance
- Reflecting the planned expiry of the Japanese licences
· Operational progress
- Product innovation drove demand across scarves, ponchos and runway rucksacks
- Digital grew in all regions
o Reflecting investment in mobile and single pool of inventory model
- Japan retail revenue more than doubled in FY 2016
- Strong response to advertising campaign supporting launch of Mr Burberry fragrance
· FY 2017 outlook
- Challenging demand environment
- H1 wholesale expected to be down by around 10%
- Japan licensing revenue to reduce further, as planned
- Underlying cost inflation pressures persist
- Partly offset by FX benefit at current exchange rates
"Like the eerie mist that invades every nook and cranny in a horror film, it's not just investors in commodity cyclicals that have experienced chills down their spine since China's latest crash. Luxury goods brand LSE:BRBY:Burberry has lost nearly ..."
Forecasts have been downgraded for luxury retailer Burberry (BRBY) over concerns about sales in Asia and the US.
Liberum analyst Tom Gadsby retained his sell recommendation and cut the target price from £10.50 to 925p. The shares were broadly flat at £11.22 yesterday.
We downgrade our low-end forecasts on concerns that headwinds will persist for Burberry, he said.
Despite a Q3 pick-up in mainland China, retail sales in Asia remain resolutely negative and flat in the US and we believe that wholesale orders are under pressure. Burberry has cut costs to meet 2016 forecasts but we see limited scope to continue this without damaging the business.
We cut 2017 earnings per share by 5.3% and 2018 by 6.5%."
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