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

Disclaimer: GAIN Capital UK Limited (trading as "Forex.com") is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, Forex.com does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by Forex.com or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although Forex.com is not specifically prevented from dealing before providing this material, Forex.com does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.