Burberry
shares
fell
after
the
company
announced
a
fall
in
profits
for
the
full
year.
Shares
remain
significantly
undervalued
according
to
Morningstar.
•
Fair
Value
Estimate:
£21
•
Morningstar
Rating:
5
stars
•
Morningstar
Economic
Moat
Rating:
Narrow
•
Morningstar
Uncertainty
Rating:
High
Burberry
(BRBY)
on
Wednesday
warned
trading
conditions
are
likely
to
remain
“challenging”
as
it
reported
a
sharp
decline
in
annual
profit.
Shares
in
the
London-based
luxury
goods
retailer
lost
5%
to
£11.27.
The
FTSE
100
stock
is
down
54%
over
the
past
12
months.
Burberry
said
pretax
profit
plummeted
40%
to
£383
million
in
the
financial
year
that
ended
March
30
from
£634
million
the
year
prior.
Adjusted
operating
profit
fell
34%
to
£418
million
from
£634
million.
This
was
at
the
bottom
end
of
the
range
of
£410
million
to
£460
million
given
by
Burberry
in
January
when
it
lowered
guidance.
Back
in
November,
it
had
guided
for
adjusted
operating
profit
towards
the
lower
end
of
the
consensus
range
at
that
time
of
£552
million
to
£668
million.
Revenue
fell
a
less
severe
3.9%
to
£2.97
billion
from
£3.09
billion
a
year
earlier.
Burberry
Sales
Down
in
Asia-Pacific
Full-year
like-for-like
sales
were
down
1.0%
but
had
deteriorated
as
the
year
progressed.
First
half
growth
of
10%
was
offset
by
an
8.0%
decline
in
the
second
half.
In
the
fourth
quarter,
like-for-like
sales
fell
12%,
with
Asia
Pacific
down
17%
and
the
Americas
down
12%.
Mainland
China
like-for-like
sales
fell
19%
in
the
fourth
quarter.
Burberry
left
its
dividend
unchanged
at
61.0p
per
share.
Looking
ahead,
Burberry
said
it
expects
trade
in
the
first
half
of
financial
2025
to
“remain
challenging”.
Burberry
said
wholesale
revenue
is
estimated
to
fall
by
around
25%
in
the
first
half
as
it
increases
control
of
distribution.
It
expects
to
see
the
benefit
of
the
actions
it
is
taking
from
the
second
half.
Burberry
said
it
also
expects
a
currency
headwind
of
around
£30
million
to
revenue
and
around
£20
million
to
adjusted
operating
profit
in
financial
2025.
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