Troubled British luxury label Burberry Group PLC (LSE:BRBY) stands at a "complex crossroads" as new chief executive Joshua Schulman takes command, said Stifel in a broker note.
Schulman faces an uphill battle to turn the ship around as current market conditions, particularly plummeting Chinese luxury demand, have sent Burberry stock to 15-year lows.
Stifel has cut its sales forecasts for Burberry by 8% for financial 2025 and 10% for financial 2026.
The bank now expects Burberry to report an operating loss in 2025, driven by deeper losses in the first half of the year and persistent sales weakness through the second half.
“Investor focus should be on the new strategic vision from Burberry's new CEO, Joshua Schulman, aimed at turning the brand's fortunes,” said Stifel analysts.
They added: “In July, Burberry chairman Gerry Murphy stated that investors should not expect a major shift in brand strategy but rather a rebalancing of products and price points more familiar to Burberry's traditional clientele.
“It seems the aim is to make Burberry a more democratic luxury brand, while still maintaining a genuine luxury context.
“We anticipate a heightened focus on pragmatic merchandising, with a greater emphasis on classic, timeless pieces, an expanded offering in the core outerwear category, and reinforced options at opening price points.”
Stifel has a 'hold' rating on Burberry stock with a 720p price target. Shares slipped 3.5% to 638p on Thursday.
First-half results are due on 14 November.