Tag Archives: Burberry Group

Business, Finance, Occupation & Industry

Should I Invest in Burberry Group?

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By Kevin Godbold, The Motley Fool

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LONDON — To me, capital growth and dividend income are equally important. Together, they provide the total return from any share investment and, as you might expect, my aim is to invest in companies that can beat the total return delivered by the wider market.

To put that aim into perspective, the FTSE 100 has provided investors with a total return of around 3% per annum since January 2008.

Quality and value
If my investments are to outperform, I need to back companies that score well on several quality indicators and buy at prices that offer decent value.

So this series aims to identify appealing FTSE 100 investment opportunities, and today I’m looking at Burberry Group , owner of the famous distinctive check-design brand and operator of dedicated retail outlets around the world.

With the shares at 1,335 pence, Burberry’s market cap is 5,902 million pounds.

This table summarizes the company’s recent financial record:

Year to March 2008 2009 2010 2011 2012
Revenue (million pounds) 995 1,202 1,185 1,501 1,857
Net cash from operations (million pounds) 45 210 369 265 374
Adjusted earnings per share (pence) 32.4 30.6 35.9 49.9 62.8
Dividend per share (pence) 12 12 14 20 25

In recent news, new Chief Operating Officer John Smith has started in the job, just after the release of the company’s latest three-month report, covering the period to Dec. 31, 2012.

It’s always nice to be part of a winning team, but Smith could have a hard act to follow judging by the strength of recent trading. Underlying revenue growth in the Asia-Pacific region came in at 16%; impressive enough, but all the more so given that 41% of overall sales came from the area in the quarter. Meanwhile, Europe, accounting for 27% of sales, grew at 4%, the Americas, with 26% of sales, grew at 4%, and the 12% sales in the rest of the world grew at 6%.

Burberry has a fine-tuned plan for growth, which aims to capture even more of that fast-growing Asian demand. As long as the ever-so-English check holds its fashion appeal, as it has for the past 160 years, the total-return prospects for Burberry shareholders continue to look attractive.

Burberry’s total-return potential
Let’s examine five indicators to help judge the quality of the company’s total-return potential:

  1. Dividend cover: Adjusted earnings covered last year’s dividend 2.5 times. 4/5
  2. Borrowings: At the last count, there was net cash on the balance sheet. 5/5
  3. Growth: Revenue and earnings have been growing with robust cash flow. 5/5
  4. Price to earnings: A forward 17 seems to price in growth and yield expectations. 3/5
  5. Outlook: Good recent trading and a positive outlook. 5/5

Overall, I score Burberry 22 out of 25, which encourages me to believe the company has potential to outpace the wider market‘s total return going forward.

Foolish summary
There isn’t much to grumble about with regard to the scoring on the business-quality metrics. The valuation seems to price-in growth expectations; however, the outlook is encouraging.

I’m encouraged to buy Burberry on the dips along with a share that one of …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Tiffany's Earnings Beat Estimates, Despite Sluggish U.S. Sales

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By Reuters

Asia sales boost tiffany earnings

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Kiichiro Sato/AP

By Phil Wahba

Tiffany said on Friday that the pace of its worldwide sales growth would pick up again this year, with Asia leading the increases, and its shares rose 4 percent.

The forecast of 6 percent to 8 percent sales growth suggests a return to the more robust gains Wall Street has come to expect from the high-end jeweler after a year when sales suffered from weak demand for its inexpensive silver jewelry and slower growth in China.

The New York company, which has been expanding aggressively in markets such as China, had lowered its own projections several times in the last year, raising fears that its torrid growth of recent years was ending.

Tiffany & Co. (TIF), famed for its blue boxes and expensive necklaces, said it expected sales in Asia, excluding Japan, to rise at a mid-teens percentage rate this year, compared with 8 percent last year.

Fashion brands Burberry Group and Hugo Boss AG, handbag maker Coach Inc. (COH) and Swiss watchmaker Swatch Group SA have also been upbeat about China in recent weeks.

Tiffany’s sales forecast implies a sales range this year of $4.02 billion to $4.1 billion, largely above the $4.03 billion Wall Street analysts were projecting, according to Thomson Reuters I/B/E/S.

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Global sales rose 4.1 percent to $1.24 billion in the fourth quarter ended Jan. 31, while sales at stores open at least a year were unchanged. The results were consistent with the November-December sales that Tiffany reported right after the holiday season.

Still, Tiffany reported a 3 percent decline in sales at its Fifth Avenue flagship in Manhattan, compared with a 2 percent drop in the first two months of the quarter, suggesting worsening trends in January.

During the quarter, earnings rose to $179.6 million, or $1.40 a share, from $178.4 million, or $1.39 a share, a year earlier.

The results beat analyst estimates by 5 cents a share.

The company said it expected a profit of $3.43 to $3.53 a share this fiscal year.

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Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Today's Falling Knife: Mulberry Crashes 16%

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By Sam Robson, The Motley Fool

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LONDON — Mulberry this morning announced that revenue and pre-tax profit for the year ending March 31 are expected to be below previous market expectations, sending the shares crashing 16% as of 9 a.m. EDT.

Despite seeing retail sales over Christmas in line with expections, the English luxury goods retailer blamed the shortfall on weaker-than-anticipated trading conditions after the festive period — including reduced tourist spending in London stores — and lower-than-expected in-season ordering.

This means that wholesale sales for the year are now expected to be down approximately 15% compared with the year ending March 31, 2012, while revenue and pre-tax profit are expected to come in around 165 million pounds and 26 million pounds, respectively. However, management said the order book for autumn/winter 2013 was building “satisfactorily.”

Chief executive officer Bruno Guillon commented:

After three years of rapid growth, Mulberry has experienced a year of consolidation while we build the foundations for future growth. We are focused upon optimising the distribution network and adapting our tactical marketing strategy to drive international brand awareness. We continue to reinforce Mulberry’s luxury positioning through an enhanced focus on creativity, craftsmanship and quality.

Mulberry had previously seen success off the back of the rise of the emerging middle class in China, with luxury goods competitor Burberry also performing well. With the shares currently standing at 1,035 pence, some contrarian investors may view today’s price crash as a buying opportunity. Indeed, the shares have increased more than 17-fold in the last five years since 2009’s low of 60 pence!

If you’re looking for companies that have strong potential to soar in price, then we’ve pinpointed our favorite growth share from the FTSE 100. Our analysts have produced a free report in which they evaluate its finances, risks and growth prospects going forward. Simply click here to get your copy delivered to your inbox immediately — it’s completely free.

The article Today’s Falling Knife: Mulberry Crashes 16% originally appeared on Fool.com.


Sam Robson has no position in any stocks mentioned. The Motley Fool recommends Burberry Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Source: FULL ARTICLE at DailyFinance