Burberry Shares Slump, Stock Fairly Valued

Morningstar equity analysts agree with Burberry’s plan to enhance the luxury positioning of the brand, but note the departure of Christopher Bailey is a concern

Jelena Sokolova 9 November, 2017 | 3:30PM
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Burberry store

Burberry’s (BRBY) shares fell sharply as it announced a new strategy together with second-quarter results. The new strategy focuses on continuing a brand image elevation towards luxury positioning, which involves rationalising non-luxury distribution channels in the North American and European markets, expanding leather goods and accessories offerings, and refreshing apparel with new designs.

Distribution rationalisation, which will involve some store closures, will result in flat sales in the 2019/20 financial year. Management expects high-single-digit revenue growth and strong operating leverage thereafter. 

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Burberry Group PLC1,797.50 GBX0.73Rating

About Author

Jelena Sokolova  is an equity analyst for Morningstar

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