Weaker second-quarter sales and a downbeat second-half outlook disguised much of the potential from the Burberry brand turnaround, according to Deutsche Bank.
The new Daniel Lee-designed product is still at an early stage and has only been in stories since the beginning of September.
Lee accounts for 15% of the range and limited commentary on the sales uplift relative to the remainder of the product range, also didn’t help suggests the bank.
Hence, the market has understandably assumed weaker sales trends for the remainder of the year, but Deutsche Bank believes that continuing the store refurbishment and increase in marketing spending to support the brand relaunch is important for the mid to longer-term sales and profit targets.
Even so, the target price is cut to 1,950p from 2,200p.