Among the major news on UK stocks, Burberry Group PLC (GB:BRBY) declined by more than 15% as of writing after the company reported a disappointing trading update for the first quarter of FY25. The company’s comparable store sales decreased by 21% as compared to the 18% growth recorded in the same period last year. Additionally, the company also announced the replacement of its CEO and suspended its dividend payments for FY25, targeting long-term growth.
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Year-to-date, BRBY stock has lost over 44% amid the slowdown in the luxury retail market.
Burberry Group is a leading global luxury brand specializing in clothing, footwear, and accessories.
Burberry Appoints New CEO
Burberry appointed Joshua Schulman as its new CEO and Executive Director, replacing Jonathan Akeroyd with immediate effect. Schulman is a veteran in the luxury retail market and brings extensive experience from managing brands such as Coach, Michael Kors, and Jimmy Choo. He will be responsible for leading Burberry’s ongoing turnaround efforts following the company’s prolonged challenges with weak product demand in recent years.
Highlights from Burberry’s Trading Update
Retail revenue in Q1 dropped 20% on a constant currency basis to £458 million from £589 million in the same period last year.
Regionally, comparable store sales declined by 23% in the Asia Pacific and the Americas, while it dropped by 16% in EMEIA (Europe, the Middle East, India, and Africa). Japan was the only region to show positive growth, with a 6% increase.
Looking ahead, the company has observed the trading slowdown persisting into July. As a result, it expects to report an operating loss for the first half of FY25 and expects full-year operating profit to be below the current consensus. Additionally, Wholesale revenue is projected to decrease by approximately 25% in the first half of the year and by around 30% for the full fiscal year.
Is Burberry a Good Share to Buy?
According to TipRanks consensus, BRBY stock has received a Hold rating, backed by 13 Hold and one Sell recommendation from analysts. The Burberry share price target is 1,013.08p, which is 28% higher than the current trading level.
