Burberry Group PLC (LSE:BRBY) will publish interim results and a strategic update on Thursday, November 14 after rumours emerged Moncler was eyeing up the luxury fashion firm as a potential takeover target.
Reports earlier this month signalled Bernard Arnault, chief executive of LVMH which recently invested in Moncler, was keen to push such a deal to create an “outdoor specialist giant”.
Speculation of a takeover had temporarily boosted Burberry shares, though the absence of any confirmation of a proposal is likely to leave attention on its turnaround efforts.
This comes after Burberry’s latest profit warning in July, which prompted dividend payments to be cut and coincided with the departure of chief executive Jonathan Akeroyd.
Burberry subsequently dropped off the FTSE 100 index in September, leaving the onus on new boss Joshua Schulman to lead a turnaround.
Focus will be on Burberry’s immediate priority of rebalancing its product range, refocusing marketing plans, refreshing the firm’s website and cutting costs, according to AJ Bell analysts.
A strategic update from Schulman will also be under the microscope, UBS added, which is "likely to highlight the long path to profit recovery amid the high costs needed to put the brand back on path".
Results-wise, expectations are for sales to have dropped by 22% over the first half, leaving a pre-tax loss of £63 million, according to UBS.
“The good news is that the balance sheet carries little debt,” AJ Bell added, with borrowings of £378 million covered by cash of £441 million as of March 2024.
“One other figure to note could be inventory,” analysts said, “Shareholders will not want to see a marked increase in inventory or inventory days”.