UBS last week downgraded Burberry from neutral to sell after the upscale fashion group’s stock rose by 30 per cent the previous week.
Burberry posts fourth-quarter sales next week and finals in May. “If there is no positive surprise with the trading update, we think the stock may come under pressure,” warned UBS analyst Yasuhiro Yamaguchi.
The broker said potential positives might include market share gains and a favourable foreign exchange impact, but negatives included gross margin risks and weakness in the US and Spain.
The retailer last updated in January, when it revealed a 9 per cent uplift in underlying revenue for the third quarter and reassured that profit expectations would be met. Comparable store sales were down 3 per cent in that period and Burberry said it would make additional cost savings of £30m to £35m.