Shares of FTSE 100-listed Burberry Group PLC (GB:BRBY) surged over 12% as of writing after the retailer reported a smaller-than-expected sales drop in Q3 FY25. The company’s comparable sales declined by 4%, beating analysts’ expectations of a 12% decline based on a company-compiled consensus estimate. Meanwhile, the company’s retail revenue fell by 3% at constant exchange rates compared to a 20% decline in the previous quarter.
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Burberry Group is a global luxury brand for clothing, footwear, and accessories across various international markets.
Burberry Reports Q3 Numbers
In the three months leading to December, the company’s sales improved across all its markets. In Asia-Pacific (APAC), sales were down 9%, much better than the forecasted 19% decline. While sales increased by 4% in the Americas, beating the expected 8% decline.
The company’s performance was primarily fueled by a strong holiday season in the U.S. and progress under its ‘Burberry Forward’ strategic plan. The company launched this plan in November to boost brand appeal and drive long-term growth.
Overall, these results align with a broader rise in luxury sales during the holiday season. Last week, Cartier-owner Richemont (CFRUY) reported a 10% increase in Q3 sales, fuelling optimism for a long-awaited recovery in the struggling luxury market.
Deutsche Bank Weighs In on BRBY’s Update
Analysts at Deutsche Bank highlighted the company’s strong second-half trading offsetting earlier losses. They also pointed out that the 4% decline in comparable sales outperformed their forecast of a 14% drop.
Deutsche added that the results are better than expected, partly because sales were weaker during the same period last year, making the comparison easier. However, this performance still exceeded expectations.
Deutsche Bank analyst Adam Cochrane has a Buy rating on BRBY stock.
Is Burberry a Good Share to Buy?
BRBY stock has received a Hold rating on TipRanks, backed by 10 recommendations from analysts. It includes five Hold, three Buy, and two Sell ratings. The Burberry share price target is 913.5p, which is 25% lower than the current trading level.
