Burberry Group PLC (BRBY.L): Model Update

Research evidence excerpt

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11 Aug 2026 08:58:37 ET │ 13 pages

Burberry Group PLC (BRBY.L)

Model Update

CITI'S TAKE

Buy

Price (10 Aug 26 16:30)

Target price

from £15.60

Expected share price return

Expected dividend yield

Expected total return

Market Cap

Following Burberry’s 1Q27 trading update, we revise our forecasts after a

fourth consecutive quarter of positive LFL growth (+5%) since the launch

of the Burberry Forward strategy and two-year stacked LFL turning

positive for the first time in over two years. We trim FY27E/FY28E cFX

sales growth forecasts by 0.6%/0.8% (FY29E unchanged), reflecting

slightly softer Retail LFL assumptions (+5%/+6%), partly offset by

stronger Wholesale forecasts (+7%/+6%) driven by encouraging partner

demand. We leave both gross margin forecasts (68.5%/69.0%/69.5% in

FY27E-FY29E) and opex growth assumptions broadly unchanged,

continuing to expect low-single-digit opex growth in FY27E as margin

gains are reinvested into the brand. As a result, EBIT and EPS are reduced

by 1%/2%/2% and 1%/3%/2%, respectively, across FY27E-FY29E.

Medium-term expectations remain conservative, with cons. FY29E EBIT

still ~10% below the pre-pandemic FY14-19 average. We lower our TP to

£15.1 (from £15.6) based on our updated DCF, implying ~22x CY28E P/E.

Buy.

Thomas ChauvetAC

Burberry Group PLC (GBP)

Year to 31 Mar

2025A

2026A

2027E

2028E

2029E

Sales (£M)

2,461.0

2,420.3

2,555.2

2,708.5

2,890.6

Profit Before Tax (£M)

-37.0

94.0

193.5

306.8

368.4

Diluted EPS (p)

-14.8

15.2

38.4

60.9

73.2

Diluted EPS (Old) (p)

-14.8

15.2

38.8

62.7

74.4

PE (x)

-79.2

77.0

30.5

19.2

16.0

EV/EBITDA (x)

10.5

9.0

7.9

6.9

6.5

DPS (p)

0.0

15.0

25.0

30.0

Net Div Yield (%)

na

1.3

2.1

2.6