Burberry share price edges higher despite gloomy Q1 forecast

on Jul 13, 2015
Updated: Oct 21, 2019

Burberry (LON:BRBY) is set to report a sales slowdown this week as weakening demand from China continues to take its toll. The FTSE 100-listed luxury retailer, which is due to unveil its first-quarter figures on Wednesday, is expected to post a six percent increase in like-for-like sales, compared to a nine percent rise in the previous quarter and a 17 percent jump a year ago.

Analysts at JP Morgan said over the weekend that the company’s performance would be dragged down by Hong Kong and Macau, which have been hit hard by Beijing’s crackdown on lavish spending. They also noted that the US market had “turned more volatile”.
Apart from a sales slowdown, investors are bracing for another turbulent annual meeting this week, after advisory group Pirc urged shareholders to vote against chief executive Christopher Bailey’s “excessive” pay last year. Burberry, which will hold its AGM on Thursday, has attempted to appease shareholders by publishing further details about the composition of Bailey’s latest awards and justifying his total 2014 package, valued at £7.94 million. However, Pirc has yet again warned that Bailey’s reward is too large and urged shareholders to vote against Burberry’s latest remuneration report.
Over 52 percent of shareholders refused to back the fashion brand’s pay policies last year. According to analysts, the extent of the revolt would not be repeated this week due to Burberry’s improvement in disclosure. In addition, influential proxy voting service Institutional Shareholder Services has recommended investors vote for the remuneration report.
Despite the downbeat expectations, Burberry’s share price started today’s trading session around one percent higher. By 10:25 BST, the stock had advanced 1.16 percent to stand at 1,610.50p.
As of 10:49 BST, Monday, 13 July, Burberry Group plc share price is 1,609.50p.

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