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Tuesday preview: Burberry, Spirit Pub Company

Fashion retailer Burberry looks set to unveil a healthy third-quarter trading update despite a challenging end to 2012.

Fashion retailer Burberry looks set to unveil a healthy third-quarter trading update despite a challenging end to 2012.

The luxury clothing label's shares have recovered steadily since a sharp fall of around 27% in the week following the firm's second-quarter sales update in September.

Shares were up 1% to 1,318.00p at 15:40 Monday, showing that it was perhaps oversold in the ensuing chaos. The modest hike in shares followed Deutsche Bank's report earlier in the day.

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For the three months to the end of September (second quarter), Burberry reported that Retail like-for-like (LFL) sales rose by 1%. However, Deutsche Bank said that 3% LFL growth in the third quarter could be achievable "given slightly weaker comparatives and industry evidence of improving trends in China".

However, with a 5-10% premium to the wider luxury sector being "fair", the broker retained its 'hold' rating and 1,350p target price.

"Despite Burberry having a tough ride in the latter half of 2012 they ended the year positively, up 3.5% in 2012," said Rik Thakrar, a risk manager and senior dealer at Spread Co.

"With the luxury-goods sector beating the broader market in 2012 with a rally of around 30%, high-end consumer brands look poised to remain in focus for 2013."

Analysts at Credit Suisse labelled Burberry with an 'outperform' rating last Wednesday while Barclays Capital analysts reiterated an 'equalweight' rating in a research report Tuesday.

"Regardless, Spread Co clients have remained resoundingly bullish throughout the build-up to tomorrow's third-quarter trading update, with many taking the opportunity to top up on any weakness," Thakrar added.

In other big news on Tuesday, Spirit Pub Company releases its interim management statement. Panmure Gordon expects the group to report continued solid trading driven by a fairly strong Christmas and New Year trading period which offset poorer trading in October and November.

Tuesday January 15

INTERIMS

IG Group Holdings

INTERIM DIVIDEND PAYMENT DATE

Alliance Pharma, MDM Engineering Group Ltd. (DI)

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

Business Inventories (US) (13:30)

Consumer Price Index (EU) (10:00)

Consumer Price Index (GER) (07:00)

Retail Sales (US) (14:45)

IMSS

Halfords Group

AGMS

Conygar Investment Company, Spirit Pub Company

TRADING ANNOUNCEMENTS

Brown (N.) Group, Burberry Group, Michael Page International

UK ECONOMIC ANNOUNCEMENTS

Balance of Trade (09:30)

Producer Price Index (09:30)

RD

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