( ) shares recently hit a 14-year low. They’re down 72% in 15 months! When stocks are distressed like this, it’s always worth taking a look. After all, stock had plummeted more than 80% prior to its turnaround, while tumbled around 60% on the before ChatGPT was released.
So could Burberry shares now be in bargain-basement territory? Let’s take a look. Worrying trends On 15 July, the luxury fashion house reported a terrible first quarter for the 13 weeks to 29 June. Retail revenue plunged 22% year on year to £458m, with comparable store sales down 21%.
It said the weakness had continued into July and if it persists, it could even result in a H1 operating . Looking ahead, it expects wholesale revenue to decline by around 30% for the full year. Meanwhile, the dividend was axed and a fourth CEO in a decade has come in.
An aesthetic faux pas Currently, the stock’s trading on a (P/S) ratio of 0.87. That looks too low at first glance, even if annual sales are set to fall.
On the other hand, a couple of things worry me here. The first is that Q1 sales fell in every single market (except Japan) where Burberry operates. So this isn’t just a China issue.
Second, Chairman Gerry Murphy said on the Q1 conference call that the firm had “ ”. That is the brand’s move further upmarket with a new style under chief creative officer Daniel Lee during a luxury sector downturn hasn’t worked. Yet he also said there will be no major strategy shift: “ ”.
In FY15, revenue was £2.