Burberry shares under pressure after trading update

Burberry, the luxury fashion house, reported that retail revenue declined 48% on year to 257 million pounds in the 13 weeks ended June 27, down 45% on a comparable basis.

Stocks (3)

Burberry, the luxury fashion house, reported that retail revenue declined 48% on year to 257 million pounds in the 13 weeks ended June 27, down 45% on a comparable basis. The company stated: "Throughout Q1 2021 COVID related government restrictions eased allowing the gradual reopening of our retail store network from peak closures at the end of March. This underpinned a progressive improvement in our comparable retail sales growth with June declining around 20% compared to a 45% decline for the total quarter. Based on our comp retail sales performance in June 2020 (-20%), we expect Q2 2021 (ended September 2020) to decline by 15% to 20%. In wholesale, we are collaborating with our partners to protect the brand and as a result anticipate H1 2021 sales declining around 40% to 50%."

 

From a chartist point of view, the stock price fell below the rising 50-day simple moving average thanks to the bearish gap opened this morning. Prices are trying to escape from an upward-sloping channel in place since March low. The daily Relative Strength Index (RSI, 14) fell below its previous support at 46%. As long as 1600p is resistance, investors may anticipate a further decline towards 1317p. Keep a close eye on strong support at 1017p. Alternatively, a rebound above 1600p would call for a rise towards the horizontal resistance at 1732p.

Source: GAIN Capital, TradingView


More from Equities

From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.