An unexpected winner of the holiday shopping season was luxury retailer Burberry (BURBY), who surged in Friday afternoon’s trading after it was revealed just how well it did over the holiday quarter. Turns out luxury may be making a comeback with the new presidential administration in the United States, and Burberry shares surged nearly 11% in the session.
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Burberry has been working on a recovery for some time now. We heard about the plan back in November, before the holiday shopping season actually started up. Burberry’s plan featured just about everything from new products and services to an attempt to win over the sustainability crowd by making a move away from leather.
Now, the numbers are coming out, and proving that the Burberry turnaround plan is taking hold, and doing well. The Wall Street Journal noted that the results from the second half would likely “…broadly offset an adjusted operating loss it reported in the first six months of its fiscal year.” Retail revenue for the third quarter came in at $814.1 million, though even that was 3% lower than the same period a year prior. Comparable-store sales slipped 4%, though that was also a win compared to the 12% drop analysts expected.
Christmas Proved a Winner
Meanwhile, word out of Women’s Wear Daily suggests that Burberry’s biggest win came from the holiday shopping season. Given what we have already heard out of the numbers, that is not surprising. But we must remember here that Burberry took particular advantage of the holiday season in its marketing efforts.
It might be easy to forget things like Burberry’s virtual scarf try-on experience,” but seeing the star power Burberry brought forward, like the Christies and David Tennant was a lot harder to merely let pass. A business that uses everything from celebrity marketing to augmented reality is truly pulling out all the stops, and considering the sheer success of the season, proves that powerful marketing can still carry results even in a more difficult economy.
Is Burberry Stock a Good Buy Right Now?
Turning to Wall Street, no analysts are currently offering coverage of Burberry stock, so we turn instead to the last five days of trading. Burberry shares were on a slow climb for much of that period, though the climb was quite gradual. Today’s news, however, sent those shares spiking, and ultimately brought BURBY shares up 19.44% for the last five days.
