Company Chosen: Burberry Plc
Burberry is a luxury retailer based in the UK primarily like other companies in the European region that include Armani, Gucci, etc. Moreover, the industry is also a cyclical one with a large percentage of annual sales coming in the Christmas season, that is, the fourth quarter.
Share Price Movement:
During the said period, Burberry shares have gone through immense volatility with the shares moving as much as 5% in a single day, example include the red dots in the graph above. On an overall basis, the shares have gained around 10% since the last 6 weeks which could have been near 30% had the share price not fallen within the last couple of days.
A share price gain of 3% was observed on Oct 12th as the company announced its earnings in the 2nd quarter and the revenue beat expectations marked by the green dot. The main reason for the rise in the share price was however the better than expected revenue figures from China. China is currently the engine for global economic growth and any company having a foothold in China is poised for growth.
However, what is alarming is the decrease in share price that is seen in the last 2 days. This is despite the fact that the company has seen in the graph (blue line).