Burberry share price climbs as H1 results meet guidance

on Nov 14, 2013
Updated: Oct 21, 2019

iNVEZZ.com, Thursday, November 14: Shares in Burberry (LON:BRBY) rose almost two percent immediately after the opening bell in London today, after the luxury fashion retailer reported a solid half-year performance in line with expectations.

The UK’s largest luxury-goods brand said in a statement released this morning that in the six months ended September 30 it had made an adjusted pre-tax profit of £174 million. Last month, Burberry forecast a first-half profit of around the same as last year’s £173 million.
The group’s total revenue rose 17 percent to £1.03 billion, exceeding the £1 billion mark for the first time, driven by a 20 percent increase in retail revenue to £695 million. Footfall “remained soft offline but grew significantly online,” Burberry said.

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The London-based retailer ended the six-month period with net cash of £208 million and said it would pay an interim dividend of 8.8p, up 10 percent year-on-year.
CEO Angela Ahrendts commented on the results: “We are proud to announce a first half performance that saw Burberry’s revenue exceed £1 billion for the first time, reflecting the continuing strength of our global brand momentum. We remain focused on executing our retail, digital and marketing strategies in the all-important third quarter and in what remains an uncertain macro environment.”

**Full-year expectations**
In its statement today, Burberry further updated investors on its expectations for the company’s full year performance. In fiscal 2014, net new openings are still planned to contribute low to mid single-digit percentage growth to retail revenue. The 157-year-old group, best known for its camel, red and black check pattern, expects underlying wholesale revenue, excluding beauty, to increase by a mid to high single-digit percentage in the six months to the end of March 2014. The Americas, Asia travel retail and emerging market franchisees are planned to deliver solid growth, with continuing account rationalisation in Europe.

Burberry’s beauty division is projected to deliver wholesale revenue of about £140 million and incremental retail/wholesale profit of around £10 million in the full year. The company also forecast a modest rise in the retail/wholesale operating margin from the 17.1 percent achieved in 2012-13.
**Burberry share price**
Today’s update was the first from Burberry since it said last month that Ahrendts would step down by mid-2014 to take up a new position with Apple and be succeeded by Christopher Bailey who will also retain his chief creative officer role. Some Burberry investors reacted cautiously to Bailey’s promotion arguing his two roles would not sit easily together.

Shares in the FTSE 100-listed company have fallen nine percent over the last month, but they are still up 19 percent so far this year. The stock closed at 1,462p yesterday, valuing the business at £6.42 billion. Today, investors hailed the retailer’s half-year results and Burberry’s share price opened almost two percent higher.
According to AnalystRatingsNetwork data, two research analysts have a ‘sell’ rating for the stock, 15 have a ‘hold’ rating, six have a ‘buy’ rating and one has a ‘strong buy’ rating. The stock’s average rating is ‘hold’ with a consensus price target of 1,614.26p.
**As of 08:58 UTC, buy Burberry shares at 1,480.00p.**
**As of 08:58 UTC, sell Burberry shares at 1,476.00p.**
Trade these shares now through Hargreaves Lansdown from £5.95 per deal.
Prices can go up and down meaning you can get back less than you invest. This is not advice. Dealing services provided by Hargreaves Lansdown.


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