Burberry shares are down 8% this week! Is it a good time to buy?

first_img Our 6 ‘Best Buys Now’ Shares “This Stock Could Be Like Buying Amazon in 1997” Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Stuart Blair | Friday, 17th July, 2020 | More on: BRBY I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Stuart Blair owns shares in Burberry. The Motley Fool UK has recommended Burberry. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Image source: Getty Images. center_img While the FTSE 100 gained ground on Wednesday, Burberry shares fell over 6% following news of poor first-quarter earnings. The losses were extended yesterday, with the stock dropping another 3%. But the FTSE 100 share still has a lot of promise, and this could offer an excellent buying point for investors.Poor Q1 earningsThe pandemic has seen a drop in luxury demand, and this was clearly reflected in Burberry’s Q1 trading update. In fact, retail sales fell by 47% worldwide, with a 75% drop within Europe. The lack of overseas travel and the diminished number of tourists was a key reason for this fall. 5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…But the update wasn’t all negative, and I believe Burberry shares may have been oversold following the news. Firstly, the Asia-Pacific region remained fairly unharmed, with just a 10% drop in Q1 sales. Mainland China also saw an increase in sales. This demonstrates that the brand is very established within Asia, and this is certainly an area for further growth. Furthermore, the firm has also already seen improved sales in June, which are only down 20% year-on-year. This indicates that a full recovery could be possible in the near future.The fact that the firm has been able to cut costs recently is also an encouraging sign. For example, working at home has been deemed a success, and the company should therefore be able to cut office expenses. This restructuring should be able to save around £55m for the fashion brand. Burberry COO and CFO Julie Brown has also implied that these savings could be used for future marketing activities and digital campaigns, and I think Burberry shares could profit from this.Environmentally and ethically friendlyIn a world where fashion is a large contributor to global pollution, Burberry has endeavoured to ensure that it’s environmentally friendly. This includes plans to become carbon-neutral by 2022. The recently launched ReBurberry Edit is also a series of collections designed to make a positive impact on the planet, due to its use of sustainable fabrics. With an ever environmentally conscious society, a focus on sustainability has ensured that Burberry is a favourite among millennials. This certainly bodes well for the future of Burberry shares.The shares are not cheapDespite a 35% year-to-date fall for Burberry shares, they are still not cheap. For example, they have a price-to-earnings ratio of nearly 50. Even in comparison to costly luxury market brands, this is still very expensive. This implies major expectations of future earnings growth.Nevertheless, as outlined above, I believe that Burberry is a very strong brand that should be able to withstand the current economic difficulties. It is also in good financial health, with plenty of cash and little debt. As a result, I’d use this dip in the Burberry share price to buy. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Simply click below to discover how you can take advantage of this. Enter Your Email Address Burberry shares are down 8% this week! Is it a good time to buy? See all posts by Stuart Blairlast_img read more