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1. Company Snapshot

1.a. Company Description

Burberry Group plc, together with its subsidiaries, manufactures, retails, and wholesales luxury goods under the Burberry brand.The company operates in two segments, Retail/Wholesale and Licensing.It provides womenswear, menswear, childrenswear, beauty, eyewear, shoes, and accessories, as well as leather goods, such as bags.


The company also licenses third parties to manufacture and distribute products using the Burberry trademarks.Burberry Group plc sells its products through Burberry mainline stores, concessions, outlets, digital commerce, Burberry franchisees, department stores, and multi-brand specialty accounts, as well as through Burberry.com website.As of April 2, 2022, the company operated 218 stores, 143 concession stores, 57 outlets, and 38 franchise stores.


It operates in the Asia Pacific, Europe, the Middle East, India, Africa, and the Americas.Burberry Group plc was founded in 1856 and is headquartered in London, the United Kingdom.

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1.b. Last Insights on BRBY

Burberry Group plc faced challenges due to declining sales, particularly in China and the rest of Asia, although at a slower rate than previous quarters. Despite a 1% drop in overall comparable retail sales in Q1, the company showed resilience, with sales returning to growth in Europe and strengthening in the Americas. However, the luxury brand's turnaround efforts under CEO Josh Schulman are ongoing, with plans to cut a fifth of its global workforce. Institutional investors remain optimistic, with 87% ownership, and analysts expect a gradual recovery.

1.c. Company Highlights

2. Burberry's Interim Results Show Signs of Recovery

Burberry's financial performance showed signs of recovery in the first half, with total revenue reaching GBP 1.03 billion and adjusted operating profit of GBP 19 million. The company's gross margin recovered, up 410 basis points to 67.9%, driven by a healthier inventory position, with net inventory down 24% versus last year. Earnings per share (EPS) came out at 0.006, beating analyst estimates of -0.02088.

Publication Date: Nov -15

📋 Highlights
  • Q2 Retail Growth Resumes: 2% comp sales growth, first positive result in 2 years
  • Gross Margin Recovery: 67.9% (up 410 bps) driven by 24% lower net inventory
  • Annualized Cost Savings: GBP 80 million target on track by year-end
  • China Market Recovery: 129% increase in earned reach and 10% new customer growth
  • Full-Price Sell-Through Strength: Offset outlet declines with less discounting, 330 bps margin tailwind in H1

Revenue and Margin Analysis

The company's retail business returned to growth, with Q2 comp sales growth of 2%, the first positive comp growth in 2 years. Wholesale revenue decreased by 11%, but the reaction to the Summer 2026 wholesale market was positive, with a significant increase in orders from key partners in the U.S. and Europe. The company expects continued margin improvement, with a focus on simplification, productivity, and cash flow.

Operational Highlights

One year into the Burberry Forward strategy, CEO Joshua Schulman believes in the brand's potential more than ever, citing sequential improvement in customer growth and a significant increase in sell-through rates for autumn and winter collections. The company is on track to deliver GBP 80 million in annualized savings by the end of the year and is confident in its path to build brand relevance and value creation.

Valuation Metrics

With a P/E Ratio of -58.77 and a P/S Ratio of 1.79, the market is pricing in a challenging growth trajectory for Burberry. The company's EV/EBITDA ratio stands at 39.72, indicating a relatively high valuation compared to its earnings. Analysts estimate next year's revenue growth at -1.5%, which may not be fully reflected in the current valuation.

Segment Performance

In China, the market is stabilizing, and Burberry's inflection was driven more by internal changes, with customer engagement improving globally, particularly in China. Womenswear was positive in H1, while menswear and accessories were down 3-4%, but showed sequential growth in Q2. The company is rebuilding its leather goods category, with green shoots in areas like the B Clip bag and refreshed vintage Check.

Cost Savings and Guidance

3. NewsRoom

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Why Analysts See Burberry’s Story Shifting Amid Recovery Hopes and Fresh Price Targets

Nov -28

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Retailers Hype—and Hope for—a Busy Black Friday This Year

Nov -26

Source: investopedia.com

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Bloomingdale's, Burberry CEOs on Retail's Next Chapter

Nov -19

Source:

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UK Value Stocks: Nichols and Two Others Priced Below Estimated Worth

Nov -18

Source:

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Burberry comparable sales return to growth in Q2 FY26

Nov -14

Source:

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Burberry Group PLC (BBRYF) Half Year 2026 Earnings Call Highlights: Navigating Challenges with ...

Nov -13

Source:

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Quince Knows What You’re Looking For. And It’s Making It Cheaper

Nov -13

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Burberry Revamp Proves the Right Style as Streak of Falling Sales Ends

Nov -13

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.19%)

6. Segments

Retail/Wholesale

Expected Growth: 1.2%

Burberry's 1.2% growth in Retail/Wholesale is driven by strategic pricing, improved product mix, and increased online sales. The brand's focus on luxury and digital transformation, as well as its efforts to enhance customer experience, have contributed to the growth. Additionally, the company's expansion in Asia, particularly in China, has also boosted sales.

Licensing

Expected Growth: 0.8%

Licensing growth driven by Burberry's strong brand reputation, increasing demand for luxury goods, and strategic partnerships. The 0.8% growth rate is attributed to the company's focus on high-margin licensing agreements, expansion into new markets, and effective brand management.

7. Detailed Products

Trench Coats

Iconic and timeless outerwear designed for both men and women, featuring classic designs and high-quality materials

Handbags

Luxurious and stylish bags designed for both men and women, featuring high-quality materials and classic designs

Ready-to-Wear

High-quality, fashionable clothing for men and women, featuring classic designs, luxurious materials, and exceptional craftsmanship

Accessories

Luxurious and stylish accessories for men and women, including scarves, hats, belts, and more

Beauty and Fragrances

Luxurious and high-quality beauty and fragrance products for men and women, featuring iconic scents and innovative formulas

Children's Wear

Stylish and high-quality clothing for children, featuring classic designs, luxurious materials, and exceptional craftsmanship

8. Burberry Group plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Burberry's products are luxury goods, and customers may substitute them with other luxury brands. However, the brand's strong reputation and quality products reduce the threat of substitutes.

Bargaining Power Of Customers

Burberry's customers have some bargaining power due to the availability of alternative luxury brands. However, the brand's strong reputation and customer loyalty reduce this power.

Bargaining Power Of Suppliers

Burberry's suppliers have limited bargaining power due to the company's large scale and global presence. The company can negotiate favorable prices and terms with its suppliers.

Threat Of New Entrants

The luxury fashion industry has high barriers to entry, including high startup costs and the need for a strong brand reputation. This reduces the threat of new entrants.

Intensity Of Rivalry

The luxury fashion industry is highly competitive, with many established brands competing for market share. Burberry faces intense rivalry from brands such as Gucci, Louis Vuitton, and Prada.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 34.61%
Debt Cost 5.96%
Equity Weight 65.39%
Equity Cost 9.58%
WACC 8.33%
Leverage 52.92%

11. Quality Control: Burberry Group plc passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Verallia

A-Score: 5.9/10

Value: 6.5

Growth: 5.3

Quality: 3.8

Yield: 8.8

Momentum: 4.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Pandora

A-Score: 4.9/10

Value: 4.9

Growth: 7.4

Quality: 7.1

Yield: 4.4

Momentum: 2.5

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
Swatch

A-Score: 4.1/10

Value: 5.5

Growth: 1.7

Quality: 4.6

Yield: 5.0

Momentum: 2.5

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Burberry

A-Score: 3.8/10

Value: 4.0

Growth: 1.9

Quality: 2.2

Yield: 3.8

Momentum: 9.5

Volatility: 1.7

1-Year Total Return ->

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Stock-Card
Brunello Cucinelli

A-Score: 3.8/10

Value: 1.1

Growth: 7.8

Quality: 5.0

Yield: 1.2

Momentum: 4.0

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Capri

A-Score: 1.8/10

Value: 6.3

Growth: 1.4

Quality: 2.4

Yield: 0.0

Momentum: 0.5

Volatility: 0.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

12.3$

Current Price

12.3$

Potential

-0.00%

Expected Cash-Flows