- Burberry Group
- 14 March 2025 08:59:49
Source: Sharecast
In a note on European luxury goods, the bank also put Gucci owner Kering on ‘negative catalyst watch’ into its first-quarter trading update on 23 April.
JPM said that with volatile data/news flow on the state of the consumer in the last couple of weeks, it has extended its Brand Heatmap analysis to gauge consumers’ engagement with luxury brands after the festive season.
"Our analysis indeed suggests more muted trends for the sector since the beginning of the year, with notably a largely broad-based step down in consumer engagement in February," it said. "This is also consistent with our view published last week that Q1 25 will show no further improvement versus Q4, but rather in some cases some sequential growth moderation."
From this analysis, it expects both Gucci (Kering) and Burberry to have seen particularly soft performances this quarter.
"For Burberry, following such strong improvement seen last quarter, a new slowdown should come as a disappointment in our view to investors hoping the brand momentum has turned a corner," it said.
"Indeed, past the gifting season (particularly favourable for scarves) and the heavy discounting period in the second half of November/beginning of December, Google trends materially slowed sequentially and website visits dropped back to double-digit declines, not dissimilar to the trends of H1 24."
JPM said that with current consensus instead looking for a sequential improvement of retail LFL, it thinks the risk in the short term is skewed to the downside.
"On this basis, we place Burberry on negative catalyst watch into its FY25 results (on 14th of May)," it said.