Burberry Group (LON:BRBY) Issues Earnings Results

Key Points

• Burberry reported first-half comparable retail sales growth of 4% and revenue growth of 6% to £1.1 billion. Adjusted operating profit more than tripled to £62 million, and the adjusted operating margin rose to 5.7%.
• Wholesale revenue grew 17%, with double-digit growth in outerwear and gains across other categories. Regional results were mixed: the Americas grew 12% and Greater China 7%, while EMEIA declined 2% amid weaker tourist activity and outlet traffic.
• Gross margin benefited from a one-off supply-chain rebate; excluding it, underlying gross margin fell about 10 basis points. Management expects margin expansion in the second half and full year, while citing an uncertain luxury-market backdrop.

Burberry Group (LON:BRBY - Get Free Report) 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 for the quarter. Burberry Group had a return on equity of 2.29% and a net margin of 0.87%.

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 8.1%

LON BRBY traded up GBX 88.50 on Thursday, hitting GBX 1,181.50. 248,336,031 shares of the stock were exchanged, compared to its average volume of 22,100,949. The company has a quick ratio of 1.63, a current ratio of 1.87 and a debt-to-equity ratio of 162.02. Burberry Group has a fifty-two week low of GBX 953.40 and a fifty-two week high of GBX 1,376.50. The company has a market cap of £4.23 billion, a PE ratio of 200.25, a PEG ratio of 1.66 and a beta of 0.70. The company has a 50-day moving average price of GBX 1,050.87 and a 200-day moving average price of GBX 1,102.47.

Analyst Ratings Changes

Several equities research analysts recently weighed in on BRBY shares. Citigroup cut 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 research note on Wednesday, August 12th. Royal Bank Of Canada downgraded shares of Burberry Group to a "sector perform" rating and dropped their price target for the stock from GBX 1,400 to GBX 1,200 in a research note on Tuesday, September 22nd. Berenberg Bank reaffirmed a "hold" rating and set a GBX 1,080 price objective on shares of Burberry Group in a research report on Thursday, July 23rd. Finally, Jefferies Financial Group reiterated an "underperform" rating and issued a GBX 940 price objective on shares of Burberry Group in a research note on Thursday. Four analysts have rated the stock with a Buy rating, two have given a Hold rating and two have given a Sell rating to the company's stock. According to MarketBeat, the stock has a consensus rating of "Hold" and a consensus price target of GBX 1,256.25.

Burberry Group Company Profile

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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.