Burberry and Pearson both have lots to do to confound sceptics

By John Harrington / January 16, 2018 / www.proactiveinvestors.co.uk / Article Link

Christmas may be long over but it is still a hot issue for the retail sector, which remains in the throes of the Yuletime trading update season.

On Wednesday it will be the turn of fashion firm Burberry to sashay down the catwalk.

Investors will be looking for a smooth execution of Burberry's new strategy under its new boss.

One of the first things new chief executive Marco Gobbetti did when he took office in November was to unveil new plans to transform the business amid a tough retail market.

He said the retailer would move in further upmarket and position itself "firmly in luxury" to try and take advantage of the uber-rich who have still been splashing the cash while the rest of us tighten the purse strings.

Given that it has only been a few months since the plans were made public, we're unlikely to get an in-depth update, but a mention that things are coming along as planned wouldn't go amiss.

As for other things to look for, sentiment will likely be driven by sales numbers and Hargreaves Lansdown is "hopeful the group can deliver a sixth consecutive quarter of positive like-for-like growth"

Educational publisher Pearson plc (LON:PSON) will issue a trading statement and analysts at Liberum Capital expect the FTSE 100 listed firm to disappoint the market on 2018 guidance, either with this update or with its full-year results.

In a note to clients last week, the analysts said: "2018 is shaping up to be another difficult year in US Higher Education and the recent move by #2 player Cengage to offer an 'all you can eat' pricing model threatens to introduce the tsunami of price deflation on top of volume declines and industry pressures continue."

They observed that Pearson has limited room for further extensive cost-cutting given it has already restructured extensively, while it is also affected negatively by the recent weakening of the US dollar versus the pound.

The Liberum analysts pointed out that they are 16% below consensus estimates for full-year 2018 and reiterated a 'sell' rating on the stock but raised their target price to 380p from 330p, albeit with the shares changing hands at 730p each on Monday.

Significant updates e xpected

Production update: BHP Billiton plc (LON:BLT), Hochschild Mining PLC (LON:HOCH)

Trading update: Burberry PLC (LON:BRBY), Pearson plc (LON:PSON), Diploma PLC (LON:DPLM), Clinigen Group PLC (LON:CLIN), Secure Trust Bank PLC (LON:STB), Henry Boot PLC (LON:BOOT), City of London Investment Group PLC (LON:CLIG)

Economic data: US industrial production; Federal Reserve Beige Book

 

Recent News

China's gold holdings to central bank reserves still low

September 30, 2024 / www.canadianminingreport.com

China has broad effect on gold market

September 30, 2024 / www.canadianminingreport.com

Gold stocks mixed after previous week's huge gains

September 23, 2024 / www.canadianminingreport.com

Large TSXV gold multiple driven up by high Artemis weighting

September 23, 2024 / www.canadianminingreport.com

Monetary-driven precious metals outperform major base metals

September 09, 2024 / www.canadianminingreport.com
See all >
Share to Youtube Share to Facebook Facebook Share to Linkedin Share to Twitter Twitter Share to Tiktok