Analysts: Burberry to post 3 percent rise in sales in first update under new CEO

Burberry’s first sales update after the company’s CEO Marco Gobbetti's announced an overhaul that will see the brand ‘upgraded’ to focus on higher-end shoppers are posed to be positive, according to the City.

Barclays predicts the firm will post a 3 percent rise in like-for-like sales in the third quarter, its sixth consecutive period of positive figures. Furthermore, Burberry could have been boosted by the Christmas gifting market, further highlighted Barclay’s analyst Julian Easthope.

Gobbetti´s plans to “sharpen” Burberry to bear a 3 percent sales increase for the brand

Back in November Gobbetti unveiled a new vision for the firm in November in a bid to "sharpen" the brand's positioning. This renewed strategy will see a good number of Burberry’s stores slashed, specially affecting Burberry's wholesale arm.

Burberry will also ditch its outlets within department stores, and shut stores that are not in or near communities of luxury shoppers.

In this regard, Nicholas Hyett, equity analyst at Hargreaves Lansdown quoted by the ‘Financial Times’, said: "All being well the group will emerge both robustly profitable and with more control over its own destiny. However, we're unlikely to get a meaningful update this early on.” Hyett cautioned the market advancing that "For these results, sentiment will be driven by sales numbers. We're hopeful the group can deliver a sixth consecutive quarter of positive like-for-like growth."

"While analysts acknowledge the potential, the short-term focus was on the impact of the higher capital requirements and lower sales numbers. Consequently, on the day of the news the shares shed 10 per cent. Smooth execution of the new strategy will be the priority this year, and a potential driver of the share price,” concluded Hyett.

Photo: Burberry Official Website

 

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