Blue chip firm Burberry Group PLC (LON:BRBY) is in the midst of a major overhaul of its business and management as the luxury goods market struggles for momentum.
The group will issue a first quarter trading update on Wednesday, the first to be delivered by Marco Gobbetti – a former chief executive and chairman of fashion and accessories brand Céline, owned by French rival LVMH – who only took over the reins as Burberry’s new chief executive on July 5, replacing its former chief designer Christopher Bailey.
READ: Burberry's second half revenue struts lower as licensing and wholesale sales fall
In a recent preview note, analysts at Barclays Capital said: “We head into Q1 sales to June a little cautious despite an easy comp as our social media brand heat data suggests things have plateaued.”
Key to the luxury group is the health of the Chinese economy, but the latest evidence is that China is beginning to show some weakness again.
However, for the group as a whole, Burberry has reported better quarterly updates lately and there is expectation for some of the momentum to continue.
There may also be a continued pickup in the European markets, while UK sales should be boosted by a weak sterling and overseas travellers shopping over here.
Barclays Capital’s analysts are assuming a 3% rise in Burberry’s like-for-like sales for the first quarter.
In April, Burberry reported a 1% decline in total revenue on an underlying basis for the six months to 31 March, with retail revenue - which represents 80% of the total – up 3%.
Barratt to continue positive housebuilder trends
Housebuilders will also be in the spotlight again, with FTSE 100-listed Barratt Developments PLC (LON:BDEV) expected to continue the flow of upbeat trading figures from companies in the sector with double digit revenue growth.
Barratt’s latest update is also expected to show legal completions and average high prices continuing to rise.
As with its peers, the group’s statement will likely suggest that last month’s UK general election did not cause too much of a disruption as consumer confidence levels remain high with good mortgage rates and availability.
But it will be interesting to see what Barratt’s plans are going forward such as its land bank acquisition strategies and plans for new retail showrooms.
Significant announcements expected on Wednesday July12:
Trading Statements: Burberry Group PLC (LON:BRBY), Barratt Developments PLC (LON:BDEV), JD Wetherspoon PLC (LON:JDW), Eve Sleep (LON:EVE), Hochschild Mining PLC (LON:HOC), Solid State PLC (LON:SSP), Ophir Energy (LON:OPHR), Robert Walters PLC (LON:RWA), Xaar PLC (LON:XAR)
Finals: Micro Focus International PLC (LON:MCRO)
Interims: Bankers' Investment Trust PLC (LON:BNKR)
AGMs: BT Group plc (LON:BT.A)
Economics: UK May unemployment data