Burberry (BRBY) impresses the financial catwalk as shares surge

China segment of the business saw large sales growth, boosting overall revenue increase.

Article updated: 16 July 2019 11:00am Author: Graham Spooner

  • Popular collection designed by Riccardo Tisci and growth in China boosted sales.
  • Good progress made in re-energising the Burberry brand.
  • The update should encourage investors who may have experienced a bumpy ride, we maintain our hold recommendation.

Burberry’s first quarter trading update has led to an initial 8% rise in the shares. The famous fashion name which has always been associated with higher end fashion has been attempting to go increasingly upmarket.

Overall revenue increased to £498 million, with sales up by 4%, which was ahead of market expectations. The China segment showed strong performance where sales growth was mid-teens and Europe also benefited from increased tourist spending. There has also been a good response to Riccardo Tisci's new collection. The CEO reported they remain on track with their plans to transform the group and guidance for the full year 2020 has been maintained.

Our View on Burberry - Hold

The business review, in rather flowery language, stated that Burberry has been working hard to re-energise the brand. Investors, who have experienced a rather bumpy ride over the last couple of years, will be encouraged by the update and the progress the group is making. We maintain our hold recommendation.

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Graham Spooner

Investment Research Analyst

Graham started out as a fully authorised dealer on the Stock Exchange trading floor and for various banks, before becoming an FCA-approved investment adviser. Now a respected voice in the media, Graham’s share tips and comments on the markets are frequently sought by the national press.