At Burberry Group PLC's (LSE:BRBY) interim results in mid-November, investors will be watching for evidence that CEO Jonathan Schulman’s turnaround is gaining traction after recent share price weakness.
The shares have come under pressure "due to market concerns over its stalling brand momentum" in the midst of the turnaround.
UBS analyst Zuzanna Pusz sees a long-awaited improvement in like-for-like sales but has slightly trimmed her estimates, expecting a more gradual LFL recovery this year against a "still very volatile" sector context.
"We believe that the brand remains on track to deliver on its multi-year profitability improvement due to its refocused brand strategy."
LFL sales should be returning to positive territory for the first time in almost two years, says Pusz, who expects second-quarter retail sales to be similar to a year ago, down around 1% to £425 million - but up 1% at constant currency rates.
Wholesale sales are seen falling 13%, in line with guidance from the company.
Gross margin should be much improved, thanks to reduced discounting and no recurrence of the inventory provisions seen in the prior year.
The focus will be on pricing actions in response to US tariffs, the performance of Burberry’s core outerwear category, Chinese consumer demand, and management’s outlook for the second half, the analyst said.
Profits should be heavily second-half weighted, Pusz reckons.
She maintained a 'buy' rating, arguing the stock remains an attractively valued turnaround play with the shares only 0.8 times 2026 forecast PE growth rate - anything under 1x is generally undervalued.
At 1,149p, the UBS price target of 1,575p suggests almost 40% upside if brand momentum continues to rebuild.