Broker snap: Nomura expects significant growth at Burberry

15th Nov 2011 10:23

Despite the market's cool reaction to Burberry's first half results on Tuesday morning, Nomura has upped its full-year numbers, saying it sees "significant growth potential ahead".The luxury fashion firm reported a 29% growth in revenue to £830m, while adjusted pre-tax profit rose 26% to £162m. Nomura notes that the gross margin for retail/wholesale improved by 240 basis points, helped by the shift to retail, greater replenishment and mainline outperformance, which was slightly offset by the mix shift to its Burberry Prorsum and London brands.The broker has raised its full-year adjusted pre-tax profit forecast by 1% to £372m, expecting "higher retail comp store sales growth slightly offsetting higher cost growth".Nevertheless, the broker kept its neutral stance on the stock on valuation grounds. A 1,356p target was retained.By 10:22, shares were down 4.22% to 1,361p.BC