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Summary
- Burberry Group shares crashed a little more than 10 per cent on Thursday
- Q4 FY21 sales stood lower as against the sales recognised in Q4 FY19
- However, the comparable store sales through March 2021 rose 32 per cent
- Shares shed as much as 10.31 per cent to hit at least a one-month low
- Burberry has reinstated a dividend at FY19 levels of GBX 42.5.
Shares of Burberry Group Plc (LON: BRBY), the London-headquartered designer and fashion apparel maker, crashed a little more than 10 per cent in the mid morning deals on Thursday, after the company reported a 11 per cent fall in the fourth quarter sales of financial year 2020-21 as compared to the same period a year ago.
Given the restricted environment for shoppers, partial closure of brick-and-mortar stores, and reduced spending power of consumers, the apparel maker has encountered a lot of challenges. Even with the pandemic-induced curbs and certain other restrictions, the revenue recovery accelerated through the year.
The comparable store sales in the three-month period through March 2021 rose 32 per cent year-on-year (YoY), Burberry said. However, the sales in the reporting quarter remained 5 per cent lower against the total sales recognised in Q4 FY19.
Following the development, Burberry shares cracked more than 10 per cent, emerging as the biggest losers among the 101-constituent deck of benchmark FTSE 100.
According to the latest data available with the London Stock Exchange, the Stock of Burberry shed as much as 10.31 per cent to at least a one-month low of GBX 1,887 from the previous closing price of GBX 2,104. Though the stock staged a partial comeback after touching the trough in the pre afternoon session, it continued to trade 6 per cent lower.
Burberry shares (YTD performance)
(Source: EODHD/Others, Thomson Reuters)
The stock of Burberry has been quite volatile year-to-date (YTD), but has managed to post a cumulative gain of around 15 per cent, barring Thursday’s massive losses. On a 12-month scale, the shares have garnered a return of around 55 per cent, but are yet to surpass the pre-pandemic highs.
Post declaration of the financial results, huge trading volumes were seen in the shares of burberry. Up until 1349 BST, more than 976,000 shares exchanged hands translating into a total traded turnover of around £16.29 million.
During the quarter gone by, a sharp uptick in the sales volume especially in Mainland China, Korea and the US steered over a 30 per cent rise in the three months to March. For full FY21, the total revenue of Burberry decreased by 10 per cent at constant exchange rates (CER). The yearly drop in the net sales has been largely driven by the reduced tourism and store closures.
The adjusted operating profit for the quarter came in at £396m, down 8 per cent at CER from the profit of £433 in last year in the same period. While, on the other hand, the reported operating profit for Q4 FY21 stood at £521 million, up 176 per cent.
Followed by the consequent cash generation during the quarter, Burberry has reinstated a dividend at FY19 levels of GBX 42.5.
