Proactive Investors - Burberry’s first-half sales should have risen by around 7%, according to analysts at Barclays (LON:BARC), with 4% growth in the second quarter.
Interims are due on 16 November and this should confirm markets have been tougher in Europe and Asia recently.
On the earnings front, group earnings before tax and interest should reach £223m, translating to a 16.2% underlying profit (EBIT) margin.
How new designer Daniel Lee’s first ranges have been received will be another thing to watch for, but Barclays is interested more in the numbers adding it expects a gross margin at 69.5%, as better geo and channel mix offset cost inflation and FX headwinds.
“We believe it remains too early to gauge whether the various changes announced by new management will generate top-line momentum and enable the brand to exceed the 20% EBIT margin threshold.
“We look forward to seeing how Daniel Lee's new collections are received by customers as they continue to roll out into stores.”
The bank’s price target is reduced to £22.30 to £22.90.
Burberry (LON:BRBY)’s numbers coincide with the end of a hotly debated reporting season for luxury, add Jefferies.
It’s one in which investors will be keen to assess whether the anniversary of US demand normalisation will help offset growing signs of consumer fatigue in Europe and the lack of sequential build in Chinese travel spending.
Jefferies expects a sharply slowing second-quarter sales and a mid-single-digit drop in earnings in the first half. The US bank's target price is 2,200p.