Burberry leads another week of key retail updates
British fashion house Burberry is widely expected to report an uplift in sales this week after the fall in the value of the pound made its products more attractive to foreign buyers.
Burberry posts its third quarter trading update on Wednesday, and Barclays analysts have predicted the company will announce a like-for-like sales increase of two per cent. The brand has predicted that the devaluation of sterling could bolster its annual profits by as much as £125m.
It is also thought that the luxury fashion brand will have benefited from a collaboration with Chinese pop star Kris Wu. Chinese sales now make up a quarter of Burberry's total sales, so a recent slowdown in spending in China has been hitting Burberry particularly hard.
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There were so many Christmas trading updates last week – a dozen retailers published figures last Thursday – that Shore Capital analysts released a note to complain about the retailers' "discoordination".
Although the calendar is less heavy this week, analysts and investors will still be very busy. Retailers reporting this week include Greggs, Pets at Home, Bonmarche, Halfords and Dixons Carphone.
In addition, the Office for National Statistics will publish its retail sales for December. Howard Archer, chief UK economist for IHS Markit, expects retail sales to fall 0.4 per cent month-on-month.
"This expected drop needs to be seen in the context that retail sales volumes were robust over November and October combined," he said. "Specifically, retail sales volumes managed to rise 0.2 per cent month-on-month in November after jumping 1.8 per cent in October."