Burberry warns against no-deal Brexit amid slowing sales growth
The British luxury fashion brand has warned that a no-deal scenario will dramatically increase the cost of doing business after announcing slower sales growth in its third quarter.
Burberry has warned against Britain bailing out of the EU without a deal, as it would add millions in additional trading costs for the fashion brand.
The company’s views on a no-deal Brexit come after the fashion brand missed analysts’ forecasts for third quarter sales growth, with Burberry reporting a 1% increase in revenues in the three months to December.
‘I am pleased with our progress in the quarter as we continued to build brand heat around our new creative vision and shift consumer perception of Burberry,’ CEO Marco Gobbetti said. ‘Excitement is growing ahead of next month’s launch of Riccardo’s debut collection.’
‘We will continue to manage the business dynamically as we reposition the brand,’ he added.
Burberry share price edges higher
Despite missing analysts’ forecasts, the UK fashion brand saw its share price edge higher, climbing more than 1% on Wednesday, hitting £18.02 as of 2:50pm GMT.
Burberry is in the early stages of a multi-year plan to transform and reposition the brand, with the aim of shifting consumer perceptions of the brand.
‘In fashion, appearances matter, and Burberry's 163-year-old brand is its most valuable asset,’ Equity analyst at Hargreaves Lansdowne George Salmon said. ‘In the UK the group is only just shaking the 'football hooligan' image it acquired in the early noughties.’
‘Gobbetti's fellow Italian, Riccardo Tisci, has come in as new Chief Creative Officer,’ he added. ‘He's got a good reputation in the industry, having breathed new life into the Givenchy brand, and his first collection has been well received.’
Burberry full year guidance unchanged
The British fashion brand has not amended its full year guidance in its recent trading update, with the business forecasting stable revenues and the delivery of £100 million in cumulative cost savings.
Burberry was able to offset weaker sales growth in the US by a strong social media marketing campaign in China that helped boost demand for its products in world’s second largest economy, with the company quick to brush off fears about a Chinese slowdown.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.