LONDON – Burberry is returning to the FSTE 100 on the London Stock Exchange, a year to the day after it fell out of the blue chip index due to the downward spiral of its share price in 2024.
FTSE Russell, a global index provider that provides analytics and data services to financial markets, confirmed the change at the close of trading on Sept. 3.
It said the change would be made at the close of business on Sept. 19, and take effect from the start of trading on Sept. 22.
The news follows multiple reports in WWD that a return to the FTSE 100 was likely this year.
Since Josh Schulman joined as Burberry CEO last year, its share price has more than doubled, trading at a 52-week high of 13.75 pounds. In early trading on Thursday, shares were down 1.6 percent to 12.54 pounds.
Burberry’s readmission to the FTSE 100 is another sign that Schulman’s turnaround plan is working, despite the ongoing slowdown in the wider luxury sector, and tepid demand from Chinese consumers.
In the first fiscal quarter ended June 28, sales in Greater China were down 5 percent, with Mainland China decreasing 4 percent.
The banks have turned bullish on Burberry, and also like Schulman’s “Burberry Forward” plan, which is aimed at rebuilding sales, margins and cashflow.
Since Schulman joined, the company has successfully stemmed the double-digit sales declines of the past year and outstripped growth expectations for the first fiscal quarter.
Joshua Schulman, CEO of Burberry.
Courtesy.
In the three months to June 30, comparable store sales were down 1 percent, compared with analysts’ projections of a 3 percent decline. In the corresponding quarter last year, comparable store sales were down 21 percent.
“The question for us is not whether Burberry will come back, but the magnitude to which it will, and how much investors are ready to pay for it,” HSBC said in a report in July, shortly after Burberry posted promising first-quarter results.
There were already signs of a recovery earlier this year. In May, Schulman told analysts: “If you had asked me 12 months ago where we would be today, I wouldn’t have imagined the amount of progress that this exceptional team has been making.”
Schulman added that “it’s early days, and it’s a tough macro, but we are really starting to see the potential of what lies ahead. We’re taking things step by step, but we are optimistic about the quarters ahead and optimistic about the business in general.”
Burberry made its debut on the London Stock Exchange in 2002, and entered the FTSE 100 four years later.
Companies drop out of the index when their valuations fall below a certain threshold, and it’s not an unusual occurrence. In 2019, after witnessing a slide in its share price, Marks & Spencer lost its slot in the prestigious index, only to return in 2023.
