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Burberry share price: UBS expects ‘muted set of results’

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Analysts at UBS expect Burberry (LON:BRBY) to report another ‘muted set of results’ when it updates investors on its full-year performance next week, Proactive Investors reports. The results will come after the luxury goods retailer said in January that its revenue had fallen two percent, and maintained its full-year guidance at constant exchange rates, including delivery of cumulative cost savings of £100 million.

Burberry’s share price has climbed higher in today’s session, having gained 2.08 percent to 1,939.00p as of 14:30 BST. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.35 percent higher at 7,232.98 points. The group’s shares have added more than eight percent to their value over the past year, as compared with a near six-percent loss in the Footsie.

Burberry results preview

Burberry is scheduled to post its preliminary results on Thursday and Proactive Investors reports that UBS forecasts fourth-quarter organic sales growth of three percent, comprising a one-percent like-for-like rise, flat underlying space and a +one-percent positive impact from retail calendar adjustments. For the second half of 2019 the broker assumes flat underlying total sales of £1.5 billion, EBIT of £262 million, a 175 basis points drop in the margin to 17.4 percent and earnings per share of 48.8p.

“With the new collection from Riccardo Tisci hitting the shelves only at the end of fiscal Q4, we expect another relatively muted set of results,” UBS said, as quoted by the newswire, adding that the market would “likely be closely watching out for any commentary on the performance of Tisci’s collection in store and any further signs of the turnaround being successful”.

Analyst ratings update

UBS reaffirmed the luxury goods retailer as a ‘neutral’ this week, without specifying a target on the Burberry share price, while Deutsche Bank continues to see the company as a ‘hold’. According to MarketBeat, the FTSE 100 group currently has a consensus ‘hold’ rating and an average price target of 7,232.98p.

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