MONRF - Burberry: New Creative Direction Hasn't Helped Sales (Rating Downgrade)

2024-03-06 07:04:52 ET

Summary

• Luxury stocks might have rallied recently but Burberry has clearly been left out in the cold on a disappointing performance.
• The company's new creative direction has not translated into sales growth, with sales actually shrinking in the latest quarter. The reduced adjusted operating profit guidance is also a downer.
• While the luxury market is comparatively weaker, Burberry's declining operating margins are specific to the company.
• Its forward P/E is competitive, but overall the stock isn't attractive right now. Not with a risk to its financials in the remainder of 2024.

The British luxury fashion label and company Burberry ( BURBY ) (BBRYF) has seen a fantastic price fall of 33% since I last wrote about it in September last year and an even bigger decline over the past year (see chart below)....

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