Consumer Discretionary
A globally recognised luxury brand that has existed for over 168 years - BRBY finds itself in the later stages of its brand elevation journey and currently trades at ~12x 2023 earnings. The company has been in the midst of a seven-year transformation aimed at revamping its product offerings and pricing architecture. Although market sentiment is negative towards the stock due to temporary headwinds and brand elevation risks, taking a longer term outlook Pernas Research sees a minimum of 50% upside as BRBY has the right mix of heritage and strategy.
Edition: 180
- 23 February, 2024
Consumer Discretionary
BRBY was hit by a slowdown in luxury spending including China one of its key growth markets. In Jan 24 the shares plunged after the company issued a warning to investors about lower-than-expected profits in 4Q24 & FY24. Well ahead of the company’s announcement, Sandalwood published a data-driven report on BRBY (Nov 23) alerting investors about the slowdown in Chinese spending. Sandalwood is a data vendor that specialises tracking Asia/China consumer spending through a unique platform of 25+ datasets. To help global investors, the firm will publish timely data-driven reports on public companies providing demand trend analysis and quarterly projections.
Edition: 178
- 26 January, 2024
Screening UK Stocks: Combining quality, momentum and expectations indicators
Methodology - the initial universe are stocks with $2bn+ M/Cap. After that Willis Welby starts with a quality cut off based on their measure of Intrinsic Return on Capital Employed. They then narrow down using a combination of share price momentum and EBIT revisions before incorporating their expectations analysis via their measure of the implied to Y3 EBITM ratio. This has been another month of low turnover for the UK screen and it is notable that stocks coming in are exclusively in Consumer Services with the return of three retailers (B&M, Pets at Home, WH Smith) and Flutter. The four stocks leaving are Burberry, IAG, Hikma and Serco.
Edition: 166
- 04 August, 2023
UK growth stocks
One easy response for equity investors faced with such a radical change in the backdrop for equity pricing this year is to assume that growth stocks can get further derated. Willis Welby, who use expectations analysis to help decode share prices, differentiates between duration stocks which require a transformation in business models and growth stocks which do not. They draw particular attention to IHG, Burberry, Compass, Sage, Auto Trader and Experian. Notable absentees from their analysis are the industrial fan club stocks of Croda, Halma and Spirax which did not make their consensus Y3 revenue growth criteria.
Edition: 147
- 28 October, 2022
Consumer Discretionary
Upgrades to Buy - Woozle’s primary research reveals new collections have received an extremely positive response and have been winning customers from other brands as well as attracting clientele beyond BRBY’s usual target age group. Following interviews with 37 BRBY Store Managers around the world, Woozle also found that footfall and average customer spending trends have continued to improve over the past 90 days. As store sales notably accelerated through October, Managers are very optimistic about the next 6 months that will be aided by easier comps and an improving international travel mix.
Edition: 123
- 12 November, 2021
Apparel Retailers: Store Checks, Promotional Summaries & Key Data Points
Consumer Discretionary
LVMH - less enthusiastic when it comes to pre-Fall product, perhaps too much use of animal prints on classic shapes? Also wondering if the move back to smaller cross body bags creates a lower AUR mix shift for the industry.
Hugo Boss - summer sale tells the story. According to SW Retail’s proprietary data ~60% of total SKUs are on discount this season (US 63%, UK 58%, Germany 58%) vs. 27% for Ralph Lauren and 36% for Tommy Hilfiger.
Burberry - finally serious about promotions being a thing of the past. Recent price increases (Mid to HSD %) have gone largely unnoticed, but handbags continue to disappoint vs. competitors (lack of bright colours).
Edition: 114
- 09 July, 2021