LSE:BRBY

Stock Analysis Report

Executive Summary

Burberry Group plc, together with its subsidiaries, manufactures, retails, and wholesales luxury goods under the Burberry brand name.

Rewards

Earnings are forecast to grow 12.62% per year

Earnings grew by 7.6% over the past year

Pays a high and reliable dividend of 1.82%

Risk Analysis

No risks detected for BRBY from our risk checks.


Snowflake Analysis

Flawless balance sheet with outstanding track record and pays a dividend.


Similar Companies

Share Price & News

How has Burberry Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: BRBY has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-9.9%

BRBY

-8.7%

GB Luxury

-1.1%

GB Market


1 Year Return

17.6%

BRBY

3.7%

GB Luxury

12.7%

GB Market

Return vs Industry: BRBY exceeded the UK Luxury industry which returned 12.3% over the past year.

Return vs Market: BRBY exceeded the UK Market which returned 12.7% over the past year.


Shareholder returns

BRBYIndustryMarket
7 Day-9.9%-8.7%-1.1%
30 Day-6.0%-5.8%-0.2%
90 Day2.3%1.2%6.0%
1 Year20.3%17.6%6.1%3.7%18.6%12.7%
3 Year36.2%27.3%11.3%4.2%21.8%6.3%
5 Year37.2%21.4%24.0%10.6%42.5%9.6%

Price Volatility Vs. Market

How volatile is Burberry Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Burberry Group undervalued compared to its fair value and its price relative to the market?

24.08x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: BRBY (£22.71) is trading above our estimate of fair value (£14.3)

Significantly Below Fair Value: BRBY is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: BRBY is poor value based on its PE Ratio (26.1x) compared to the Luxury industry average (19.7x).

PE vs Market: BRBY is poor value based on its PE Ratio (26.1x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: BRBY is poor value based on its PEG Ratio (2.1x)


Price to Book Ratio

PB vs Industry: BRBY is overvalued based on its PB Ratio (7.3x) compared to the GB Luxury industry average (2.6x).


Next Steps

Future Growth

How is Burberry Group forecast to perform in the next 1 to 3 years based on estimates from 19 analysts?

11.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BRBY's forecast earnings growth (12.6% per year) is above the savings rate (0.5%).

Earnings vs Market: BRBY's earnings (11.9% per year) are forecast to grow slower than the UK market (12% per year).

High Growth Earnings: BRBY's earnings are forecast to grow, but not significantly.

Revenue vs Market: BRBY's revenue (6% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: BRBY's revenue (6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: BRBY's Return on Equity is forecast to be high in 3 years time (24.7%)


Next Steps

Past Performance

How has Burberry Group performed over the past 5 years?

0.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: BRBY has high quality earnings.

Growing Profit Margin: BRBY's current net profit margins (12.9%) are higher than last year (12.4%).


Past Earnings Growth Analysis

Earnings Trend: BRBY's earnings have grown by 0.8% per year over the past 5 years.

Accelerating Growth: BRBY's earnings growth over the past year (7.6%) exceeds its 5-year average (0.8% per year).

Earnings vs Industry: BRBY earnings growth over the past year (7.6%) exceeded the Luxury industry -2.5%.


Return on Equity

High ROE: BRBY's Return on Equity (28.1%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Burberry Group's financial position?


Financial Position Analysis

Short Term Liabilities: BRBY's short term assets (£1.5B) exceed its short term liabilities (£911.7M).

Long Term Liabilities: BRBY's short term assets (£1.5B) exceed its long term liabilities (£1.0B).


Debt to Equity History and Analysis

Debt Level: BRBY's debt to equity ratio (3.6%) is considered satisfactory.

Reducing Debt: BRBY had negative shareholder equity 5 years ago, but is now positive and has therefore improved.

Debt Coverage: BRBY's debt is well covered by operating cash flow (1052.9%).

Interest Coverage: BRBY's interest payments on its debt are well covered by EBIT (142.6x coverage).


Balance Sheet

Inventory Level: BRBY has a high level of physical assets or inventory.

Debt Coverage by Assets: BRBY's debt is covered by short term assets (assets are 34x debt).


Next Steps

Dividend

What is Burberry Group's current dividend yield, its reliability and sustainability?

2.02%

Current Dividend Yield


Dividend Yield vs Market

company2.0%marketbottom25%1.8%markettop25%5.0%industryaverage2.2%forecastin3Years2.3%

Current dividend yield vs market & industry

Notable Dividend: BRBY's dividend (1.82%) is higher than the bottom 25% of dividend payers in the UK market (1.82%).

High Dividend: BRBY's dividend (1.87%) is low compared to the top 25% of dividend payers in the UK market (4.95%).


Stability and Growth of Payments

Stable Dividend: BRBY's dividends per share have been stable in the past 10 years.

Growing Dividend: BRBY's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (49.1%), BRBY's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: BRBY's dividends in 3 years are forecast to be covered by earnings (51.7% payout ratio).


Next Steps

Management

What is the CEO of Burberry Group's salary, the management and board of directors tenure and is there insider trading?

4.5yrs

Average management tenure


CEO

Marco Gobbetti (60yo)

2.5yrs

Tenure

UK£3,965,000

Compensation

Mr. Marco Gobbetti has been the Chief Executive Officer of Burberry Group Plc since July 5, 2017 and serves as its Executive Director. Mr. Gobbetti served as Executive Chairman of Asia Pacific and Middle E ...


CEO Compensation Analysis

Compensation vs Market: Marco's total compensation ($USD5.16M) is about average for companies of similar size in the UK market ($USD4.48M).

Compensation vs Earnings: Insufficient data to compare Marco's compensation with company performance.


Management Age and Tenure

4.5yrs

Average Tenure

Experienced Management: BRBY's management team is considered experienced (4.5 years average tenure).


Board Age and Tenure

2.5yrs

Average Tenure

59yo

Average Age

Experienced Board: BRBY's board of directors are not considered experienced ( 2.5 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUK£426,78524 Jun 19
Julie Brown
EntityIndividual
Role
Member of the Board of Directors
CFO, COO & Director
Shares24,051
Max PriceUK£17.75
BuyUK£8,11919 Jun 19
Ronald Frasch
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares456
Max PriceUK£17.81
BuyUK£1,97405 Feb 19
Julie Brown
EntityIndividual
Role
Member of the Board of Directors
CFO, COO & Director
Shares108
Max PriceUK£18.28
BuyUK£27405 Feb 19
Carolyn McCall
EntityIndividual
Role
Member of the Board of Directors
Independent Non Executive Director
Shares15
Max PriceUK£18.28

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Marco Gobbetti (60yo)

    CEO & Executive Director

    • Tenure: 2.5yrs
    • Compensation: UK£3.97m
  • Sarah Manley

    Chief Marketing Officer

    • Tenure: 9.3yrs
  • Stephen Gilbert

    Senior Vice President of Architecture

    • Fabrizio Fabbro

      Senior Vice President of Creative Operations

      • Annabel Gleeson

        Vice President of Investor Relations

        • Jenna Littler

          Senior Vice President of Global Integration

          • Tenure: 5.9yrs
        • Julie Brown (57yo)

          CFO, COO & Director

          • Tenure: 3yrs
          • Compensation: UK£2.00m
        • Andrew Roberts

          Vice President of Corporate Relations

          • Edward Rash

            General Counsel

            • Erica Bourne

              Chief Human Resources Officer


              Board Members

              • Debra Lee (64yo)

                Independent Non-Executive Director

                • Tenure: 0.3yrs
              • Ron Frasch (70yo)

                Independent Non-Executive Director

                • Tenure: 2.3yrs
                • Compensation: UK£156.00k
              • Fabiola Arredondo (52yo)

                Independent Non-Executive Director

                • Tenure: 4.8yrs
                • Compensation: UK£188.00k
              • Gerry Murphy (64yo)

                Chairman

                • Tenure: 1.5yrs
                • Compensation: UK£372.00k
              • Jeremy Darroch (56yo)

                Senior Independent Director

                • Tenure: 2.6yrs
                • Compensation: UK£130.00k
              • Carolyn McCall (58yo)

                Independent Non Executive Director

                • Tenure: 5.3yrs
                • Compensation: UK£83.00k
              • Orna Ni-Chionna (63yo)

                Independent Non-Executive Director

                • Tenure: 2yrs
                • Compensation: UK£117.00k
              • Matthew Key (56yo)

                Non-Executive Director

                • Tenure: 6.3yrs
                • Compensation: UK£90.00k
              • Marco Gobbetti (60yo)

                CEO & Executive Director

                • Tenure: 2.5yrs
                • Compensation: UK£3.97m
              • Julie Brown (57yo)

                CFO, COO & Director

                • Tenure: 3yrs
                • Compensation: UK£2.00m

              Company Information

              Burberry Group plc's company bio, employee growth, exchange listings and data sources


              Key Information

              • Name: Burberry Group plc
              • Ticker: BRBY
              • Exchange: LSE
              • Founded: 1856
              • Industry: Apparel, Accessories and Luxury Goods
              • Sector: Consumer Durables
              • Market Cap: UK£8.495b
              • Shares outstanding: 404.71m
              • Website: https://www.burberryplc.com

              Number of Employees


              Location

              • Burberry Group plc
              • Horseferry House
              • Horseferry Road
              • London
              • Greater London
              • SW1P 2AW
              • United Kingdom

              Listings

              TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
              BBRY.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJul 2002
              BRBYLSE (London Stock Exchange)YesOrdinary SharesGBGBPJul 2002
              BB2DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJul 2002
              BRBYLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJul 2002
              BRBY NBMV (Bolsa Mexicana de Valores)YesOrdinary SharesMXMXNJul 2002
              BURB.YOTCPK (Pink Sheets LLC)UNSP ADR EACH REP 2 ORD SHUSUSDSep 2009
              BB2ADB (Deutsche Boerse AG)UNSP ADR EACH REP 2 ORD SHDEEURSep 2009

              Biography

              Burberry Group plc, together with its subsidiaries, manufactures, retails, and wholesales luxury goods under the Burberry brand name. The company operates in two segments, Retail/Wholesale and Licensing. It offers women, men, and children apparels; and accessories, as well as beauty products. The company also licenses third parties to manufacture and distribute products using the Burberry trademarks. It markets its products through Burberry mainline stores, concessions, outlets, digital commerce, Burberry franchisees, department stores, and multi-brand specialty accounts. As of March 31, 2019, the company operated 233 mainline stores, 146 concession stores, 52 outlets, and 44 franchise stores. It operates in the Asia Pacific, Europe, the Middle East, India, Africa, and the Americas. Burberry Group plc was founded in 1856 and is headquartered in London, the United Kingdom. 


              Company Analysis and Financial Data Status

              All financial data provided by Standard & Poor's Capital IQ.
              DataLast Updated (UTC time)
              Company Analysis2020/01/26 20:38
              End of Day Share Price2020/01/24 00:00
              Earnings2019/09/28
              Annual Earnings2019/03/30


              Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.