January 24, 2025 07:44 GMT
CONSUMER CYCLICALS: Burberry; 3Q (3m to Dec) results
CONSUMER CYCLICALS
(Baa3 Neg/NR)
Some very impressive numbers from Burberry here. Seems it did not need to change its 'quintessential British DNA' - only its CEO and his strategy.
We see some value on the £30s. Earnings call 9am, prelim FY results 14th May (3.5 months).
- Q3 LFL sales -4% vs. consensus -13%
- fx -4% headwind, retail space +1% leaving net sales -7%
- APAC -9%, EMEIA -2%, Americas +4%
- US strength again driven by domestics, EMEIA fall from both locals & tourists. China within APAC was only down -7%. It says global spend from the Chinese customer was flat vs. last year.
Guidance has largely been left unch;
- Small tweak to the optimism around EBIT; "it is now more likely our second-half results will broadly offset the first-half adjusted operating loss" (i.e. more likely FY EBIT>0). Reminder 1H EBIT was adj. -£41m.
- FX headwind to revenue expected to be £65m (prev. £70m) and £25m to EBIT (prev. £20m).
- Wholesale revenue guidance still -35% (16% of group sales currently, 1H -29%)
- some of this will be purposeful pull-back - still it is weak
- Unch Capex guidance of £150m (£87m done in 1H) (down from £208m last yr)
- Dividend payments remain suspended
- Retail space to remain flat
- Unch cost saving guidance of £25m this year (£17m to come in 2H) largely netted out by restructuring costs of £20m (£8m to come in 2H)
Call at 9:00am London here; https://mni.marketnews.com/3PQ7fdg
Keep reading...Show less
220 words