General retail: Top lines up, margins down - Berenberg
29/01/2021 07:35
** According to Berenberg strong top-line growth looks set
to prevail, while margins should normalise for Global Fashion
Group (GFG) GFG.DE , Zalando ZALG.DE and Boozt BOOZT.ST
** The brokerage sees an array of top-line tailwinds, and
adds all three companies look set to post FY 2020 top-line
growth well ahead of the guidance they provided at the start of
the year
** We think they are likely to guide to robust top-line
growth in FY 2021 too, it adds
** Although some benefits - mainly the decline in return
rates - look set to persist for the first few months of 2021 at
least, Berenberg expects to see a degree of margin normalisation
for Boozt and Zalando in 2021
** The brokerage keeps GFG as its top pick, as it is
confident the company can maintain strong momentum in increasing
its share of sales from its marketplace platform in the coming
year, driving continued strong margin improvement
** It moves Zalando to "hold" from "sell" amid lack of clear
negative catalysts, and top line "too strong to ignore"
** Berenberg sees plenty to like in Boozt, but the valuation
looks full - keeps "hold"
((joanna.wodzicka@tr.com))