burberry share price? worth a punt?

[Du1point8]

Burberry 6% sales growth? Down 19% on the day!

is this worth a possible 20% gain on stock if they go back up?

anyone know the story?

[DoubleSix]

I couldn't possibly comment on a public forum.

But Charles Stanley have downgraded to Hold. Accendo say sell off is overdone. Seymour Pierce say hold. Nomura are neutral.

Personally i dont tend to jump into retailers on profit warnings but each to their own, dyor.

[Du1point8]

All because the sales growth this year was not 12% like the past 4 years...

Wipes off a 1/5th of the share value.

[raptor600]

Du1point8 said:

All because the sales growth this year was not 12% like the past 4 years...

Wipes off a 1/5th of the share value.

That's not the case though.

It was artificially high because people expected 12% - so it has just been brought down to where it should have been.

[JxT]

Not sure you really understand pricing.

Market valued it at 1300-1400 based on it growing at 25% this year, and good growth in future years.

Their results aren't awful, they are just not as good as expected. They are clearly now not going to go on that growth flight path that the market saw them on.

[Du1point8]

JxT said:

Not sure you really understand pricing.

Market valued it at 1300-1400 based on it growing at 25% this year, and good growth in future years.

Their results aren't awful, they are just not as good as expected. They are clearly now not going to go on that growth flight path that the market saw them on.

Not sure I understand were you got the 25% growth from since they are doing 12% growth per year.

If they got the 12% growth it would have been fine but they only got 6%.

[HowMuchLonger]

Is it 6% growth in sales or profit? Don't look at one number on its own, but all the numbers to get a better idea of the business status.

edit:
Sales in existing stores was flat (and decreasing)
So the 6% is all down to the new stores.

Overheads for that 6% growth would have been bigger than if the growth was in existing stores.
Demand per store has not changed, but they have stated it is reducing.

Buy clothing on trends, not retrospective financials.

Edited by HowMuchLonger on Tuesday 11th September 15:01

[FLASHG1981]

I've just bought a fair chunk of shares. It's difficult to estimate future sales growth but sterling is overbought against most currencies after breakingt through the $1.60 range so when it weakens (which I predict it will) revenues in stroger currencies will boost profits and in turn boost the share price.

[HowMuchLonger]

FLASHG1981 said:

I've just bought a fair chunk of shares. It's difficult to estimate future sales growth but sterling is overbought against most currencies after breakingt through the $1.60 range so when it weakens (which I predict it will) revenues in stroger currencies will boost profits and in turn boost the share price.

You obviously missed the bit where sales have been declining (in recent weeks) and profit is expected to be at the lower end of analysts estimates.

Regardless of currency companies such as Burberry go through trends of being in or out of fashion. Unless you know whether they are on trend i would steer clear.

Why not just play with currencies directly?

[FLASHG1981]

HowMuchLonger said:

You obviously missed the bit where sales have been declining (in recent weeks) and profit is expected to be at the lower end of analysts estimates.

Regardless of currency companies such as Burberry go through trends of being in or out of fashion. Unless you know whether they are on trend i would steer clear.

Why not just play with currencies directly?

Buying companies after a sell off has always been my investment strategy and has been a very profitable one for me. I am happy to hold my positions for 5 years if I have to, it doesn't bother me, but in most cases the stocks I buy rebound within 6 months. My most recent purchases have been Standard Chartered and Britvic which recovered very quickly. Profit being at the lower end of estimates doesn't bother me. I am bullish on Asia long term and I think the potential growth of the luxury good market is very good although I will probably opt for a quick profit if the opportunity arises. The China luxury goods market has been slowing down but this is due to deliberate government policy to slow down the housing bubble by raising interest rates. These rate rises are having the desired affect but the government has growth targets and will cut rates to resume growth if these targets are not met. I don't trade currency because I would need to use a lot of leverage to get the desired returns that I get from stock trading but I only like to buy my positions with surplus cash I can afford to lose.