Mulberry report on Thursday

Mulberry will announce its full-year figures next Thursday; analysts are estimating an operating profit of £17 million and revenue of £163 million.

A logo sits on a sign outside a Mulberry Group
Source: Bloomberg

Mulberry’s share price has taken a battering in the past few months; in December the company announced a drop in first-half profit, and two profit warnings have been made so far in 2014. The stock is trading at 732p, down 27% since its December announcement.

The high-end fashion house had a poor Christmas period, and its strategy since has been to reduce its prices in order to boost sales. Unfortunately this has tainted the exclusive image that the company has been working on for years.

Though the fashion house has suffered from declining UK sales, accounting for more than half of all its revenue, its international business is offsetting the domestic softness and the firm is continuing its expansion into the US and China.

The share price has been has been stuck in the 680-730 range for the past two months. Expectations to the downside have already managed so I doubt the stock will drop below 640. If the figures are good the shares could target 855.

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