Burberry (BRBY) AI Stock Analysis

• Market Cap: £2.36B
• Dividend Yield: 9.23%
• Average Volume (3M): 2.10M
• Price to Earnings (P/E): 61.8
• Beta (1Y): 1.55
• Revenue Growth: -15.48%
• EPS Growth: -91.10%
• Country: UK
• Employees: 9,336
• Sector: Consumer Cyclical
• Sector Strength: 60
• Industry: Luxury Goods
• EPS (TTM): 0.11
• Shares Outstanding: 359,177,100
• 10 Day Avg. Volume: 2,279,127
• 30 Day Avg. Volume: 2,095,517
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.15
• Price to Cash Flow (P/CF): -218.50
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: 1,042.92p
• Price Target Upside: 57.83% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 13

Burberry's stock performance is bolstered by strong technical momentum and healthy cash flow generation, but faces challenges from weakened profitability and high valuation. The company's ability to generate cash and pay dividends is a positive, yet the high P/E ratio indicates that the stock may be overvalued, posing a risk if growth expectations are not met.

Positive Factors

Customer Response

The response from customers over the festive period was clearly encouraging for the new CEO Joshua Schulman.

Financial Performance

Burberry reported Q3 LFL -4%, well ahead of company-collated consensus of -12%.

Strategic Initiatives

Burberry is benefitting both from an improving backdrop, especially in the US, and from the notable step up in company-specific initiatives under new CEO Schulman.

Negative Factors

Cash Flow

Free cash flow was significantly negative in 1H25 with an inventory built-up that needs to be addressed in 2H25.

Wholesale Guidance

FY wholesale guidance was lowered to a 35% decline at CER.

Burberry Business Overview & Revenue Model

Company Description

Burberry Group plc, together with its subsidiaries, manufactures, retails, and wholesales luxury goods under the Burberry brand. The company operates in two segments, Retail/Wholesale and Licensing. It provides womenswear, menswear, childrenswear, beauty, eyewear, shoes, and accessories, as well as leather goods, such as bags. The company also licenses third parties to manufacture and distribute products using the Burberry trademarks. Burberry Group plc sells its products through Burberry mainline stores, concessions, outlets, digital commerce, Burberry franchisees, department stores, and multi-brand specialty accounts, as well as through Burberry.com website. As of April 2, 2022, the company operated 218 stores, 143 concession stores, 57 outlets, and 38 franchise stores. It operates in the Asia Pacific, Europe, the Middle East, India, Africa, and the Americas. Burberry Group plc was founded in 1856 and is headquartered in London, the United Kingdom.

How the Company Makes Money

Burberry makes money through a diversified revenue model primarily driven by the sale of its luxury products. The company's key revenue streams include retail sales from its physical stores and e-commerce platforms, wholesale distribution to department stores and specialty retailers, and licensing agreements for products such as fragrances and eyewear. Burberry also benefits from strategic partnerships and collaborations that enhance its brand visibility and appeal. Factors contributing to its earnings include its global presence, strong brand identity, and focus on digital innovation, which helps attract a broad customer base and adapt to changing market trends.

Burberry Financial Statement Overview

Summary

Burberry shows strong operational efficiency but faces revenue and net income challenges. The balance sheet is stable with moderate leverage and cash flow metrics are positive, indicating good cash generation capabilities. However, weakened profitability impacts ROE, necessitating a focus on revitalizing revenue growth.

Income Statement

Burberry's income statement reveals a moderate performance with a decline in revenue by 4.07% from the previous year, and a substantial decrease in net income by 44.9%. The gross profit margin stands at a healthy 67.68%, but the net profit margin is relatively low at 9.1%. EBIT and EBITDA margins are 14.08% and 27.89% respectively, indicating a solid operating efficiency despite the revenue drop.

Balance Sheet

The balance sheet indicates a stable equity position with a debt-to-equity ratio of 1.37. The company has managed its leverage well, but stockholders' equity has decreased. The return on equity is low at 23.54%, reflecting decreased profitability. The equity ratio is 34.04%, suggesting a balanced asset structure, although slightly on the lower side for equity backing.

Cash Flow

Burberry's cash flow statement shows resilience with a notable free cash flow of £294 million and a strong operating cash flow to net income ratio of 1.87. Despite a decline in operating cash flow from the previous year, the firm's ability to generate cash relative to its earnings remains robust. Free cash flow to net income ratio is 1.09, indicating efficient cash conversion from profits.

Breakdown
Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
2.97B	3.09B	2.83B	2.34B	2.63B
	Gross Profit
2.01B	1.84B	1.68B	1.37B	1.44B
	EBIT
418.00M	640.00M	514.00M	416.40M	467.80M
	EBITDA
828.00M	1.02B	858.00M	693.10M	525.90M
	Net Income Common Stockholders
270.00M	490.00M	396.00M	376.00M	121.70M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
441.00M	1.03B	1.22B	1.26B	928.90M
	Total Assets
3.37B	3.69B	3.70B	3.50B	3.29B
	Total Debt
1.57B	1.49B	1.40B	1.36B	1.47B
	Net Debt
1.13B	460.00M	179.00M	100.80M	538.20M
	Total Liabilities
2.22B	2.15B	2.08B	1.94B	2.07B
	Stockholders Equity
1.15B	1.53B	1.61B	1.56B	1.21B
Cash Flow		Free Cash Flow
294.00M	571.00M	534.00M	473.70M	301.40M
	Operating Cash Flow
506.00M	750.00M	699.00M	591.40M	455.80M
	Investing Cash Flow
-231.00M	-153.00M	-167.00M	-93.10M	-154.10M
	Financing Cash Flow
-865.00M	-815.00M	-578.00M	-156.50M	-260.20M

Burberry Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 660.80
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:BRBY, the sentiment is Negative. The current price of 660.8 is below the 20-day moving average (MA) of 840.84, below the 50-day MA of 1012.15, and below the 200-day MA of 850.20, indicating a bearish trend. The MACD of -77.53 indicates Positive momentum. The RSI at 22.59 is Positive, neither overbought nor oversold. The STOCH value of 8.96 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:BRBY.

Burberry Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JD	77 Outperform	£3.49B	10.81	14.67%	1.38%	2.85%	61.98%
MKS	72 Outperform	£7.35B	14.39	17.19%	0.83%	6.87%	22.36%
SMWH	72 Outperform	£1.18B	17.91	20.52%	3.61%	6.97%	-14.59%
BRBY	68 Neutral	£2.36B	61.81	3.77%	9.23%	-15.48%	-91.10%
FRAS	66 Neutral	£2.37B	8.07	16.46%	―	-6.82%	-37.46%
Sector *	59 Neutral	$11.18B	10.04	-1.58%	3.96%	1.31%	-16.97%
DEBS	48 Neutral	£293.49M	―	-96.36%	―	-16.32%	-202.39%

Burberry Corporate Events

Burberry Announces Change in Major Shareholdings

Burberry Group PLC has announced a change in major shareholdings, with Norges Bank increasing its voting rights in the company to 3.157850% as of March 28, 2025. This acquisition of voting rights by Norges Bank, a major financial institution based in Oslo, Norway, signifies a notable shift in Burberry’s shareholder structure, potentially impacting its strategic decisions and stakeholder interests.

Burberry Announces Share Capital and Voting Rights Update

Burberry Group PLC announced its issued share capital as of March 31, 2025, consisting of 363,816,314 ordinary shares, with 4,639,220 held in Treasury, which do not carry voting rights. This results in a total of 359,177,094 voting rights available, a crucial figure for shareholders to determine their notification obligations under FCA rules.

Burberry Updates Share Capital and Voting Rights

Burberry Group PLC has announced its updated issued share capital as of 28 February 2025, consisting of 363,816,314 ordinary shares, with 4,639,220 held in Treasury. The total number of voting rights in the company is 359,177,094, which is crucial for shareholders to determine their interest in the company under the FCA’s Disclosure Guidance and Transparency Rules.

Burberry Updates Share Capital and Voting Rights

Burberry Group PLC announced that its issued share capital, as of January 31, 2025, consists of 363,816,314 ordinary shares, with 5,232,720 shares held in Treasury. This results in a total of 358,583,594 voting rights available, which is important for shareholders as it determines their notification requirements under the FCA’s regulations. This adjustment in voting rights may impact shareholder voting dynamics and regulatory compliance.

Burberry’s Strategic Transformation Amidst Sales Challenges

Burberry has launched ‘Burberry Forward’ to enhance brand desirability and drive long-term growth, marked by successful campaigns like ‘It’s Always Burberry Weather.’ Despite a 4% decline in comparable store sales in the third quarter, with varied regional performances, Burberry remains focused on stabilizing its business and achieving sustainable growth. The company is confident about offsetting early losses with second-half results, but faces challenges due to currency headwinds and a challenging macroeconomic environment.

Burberry Addresses Shareholder Concerns Over Director’s Re-election

Burberry announced that more than 20% of shareholders voted against the re-election of Antoine de Saint-Affrique as a Director due to concerns about his numerous directorships potentially affecting his commitment to Burberry. Despite the initial opposition, the Board has expressed confidence in his capabilities but has revealed that Mr. de Saint-Affrique will retire from the Board in July 2025, effectively resolving the issue. The company remains committed to engaging with its shareholders and will continue to provide updates through its reports.