BURBERRY PLC

Burberry Plc: Investment analysis



Burberry Plc: Investment analysis

Company Overview

Burberry Group (Burberry) is engaged in the designing, sourcing, manufacturing and distributing womenswear, menswear, non-apparel and childrenswear through a network of retail, wholesale and licensing channels worldwide. The group has operations in the UK, the US and Asia. It is headquartered in London, the UK, and employs around 6,681 people. The Burberry is working in a garment industry that is the most profitable industries in the world. All over the world the demands for the branded clothes have increased dramatically. Fashion and dressing have now emerged in the current market.

Industry

The garment industry is one of the most leading industries in the world (Katja, 2011, p.10). Garment factories and industries have now become part of the media and fashion industry. The industry is growing and developing and turn to be most dynamic industry. The changes are seen dramatic in the garment industry and to compete in this industry Burberry has to bring the latest models of clothing continuously.

Burberry vs. Industry

The group's half year results (15Nov2011) broadly matched analyst forecasts. Total group revenue jumped by 29% to £830m, while adjusted profit before tax grew by 26% to £162m. Momentum for its Retail business was maintained, while trading for its Wholesale and Licensing businesses proved in line. Sales for the Retail business increased by 45%, before adjusting for currency movements, with sales for Chinese stores making a strong contribution. Sales for the Wholesale business grew by 20%, before adjusting for currency movements, with particular strength seen in the Americas, Emerging Markets and for its Travel Retail channel (Pehlivan, 2011, p.53).

Daily Total Returns

Negative Points:

Burberry's results are exposed to changes in demand for luxury goods, which in turn is reliant on the health of the external economic environment, the stock market and ...