Burberry shares under pressure after trading update

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By :  ,  Financial Analyst

Burberry shares under pressure after trading update

Burberry, the luxury fashion house, reported that retail revenue declined 48% on year to 257 million pounds in the 13 weeks ended June 27, down 45% on a comparable basis. The company stated: "Throughout Q1 2021 COVID related government restrictions eased allowing the gradual reopening of our retail store network from peak closures at the end of March. This underpinned a progressive improvement in our comparable retail sales growth with June declining around 20% compared to a 45% decline for the total quarter. Based on our comp retail sales performance in June 2020 (-20%), we expect Q2 2021 (ended September 2020) to decline by 15% to 20%. In wholesale, we are collaborating with our partners to protect the brand and as a result anticipate H1 2021 sales declining around 40% to 50%."

From a chartist point of view, the stock price fell below the rising 50-day simple moving average thanks to the bearish gap opened this morning. Prices are trying to escape from an upward-sloping channel in place since March low. The daily Relative Strength Index (RSI, 14) fell below its previous support at 46%. As long as 1600p is resistance, investors may anticipate a further decline towards 1317p. Keep a close eye on strong support at 1017p. Alternatively, a rebound above 1600p would call for a rise towards the horizontal resistance at 1732p.

Source: GAIN Capital, TradingView

Related tags: Equities Coronavirus

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