Hard to tell what the CEO change could bring In our Burberry report Reality Check (25 June), we reminded investors about the several attempts the company has made in recent years to reignite sales growth and improve profitability. On 15 July, on top of warning again on FY Mar 25 profits, Burberry announced the replacement of CEO Jonathan Akeroyd - a bit more than 2 years after his arrival in April 2022 - with Joshua Schulman. Designer Daniel Lee was said to be confirmed and Chairman Gerry Murphy merely mentioned a ''rebalancing'' of the offering in relatively vague terms (''still luxury'', ''going back to the core'', ''need to be inclusive''). Provided this is the right path for Burberry, the positive outcome would be that Lee doesn''t repeat initial product mistakes and accepts and successfully executes this new design strategy tweak which might not have been his decision. Still plenty of unknowns in our view. FY Mar 25-27e EPS cut by 77-36% - consensus not yet fully factoring in recent warning When pre-announcing 1Q ending June 24, Burberry reported Retail comps down 21% and stated 1H ending Sep 24 (due 14 Nov) is likely to be-loss making if trends don''t improve in 2Q. On our 18% Retail comp assumption for 2Q (more commercial products will only be in store in Sep), we forecast a GBP-28m EBIT loss in 1H. Assuming Retail comps down 4% in 2H, we cut our FY Mar 25 EPS by 77%, with a 3.9% EBIT margin. We note consensus does not seem to have fully factored in the 15 July profit warning: we are 32% below VA FY25 EBIT average (-12% vs median). Small cap and 100% free float imply bid risk, but could remain theoretical Following our estimate cuts for FY Mar 25-27e, we have lowered our DCF-derived TP to GBp820 (from GBp1,100). Despite recent poor share price performance, we remain Neutral on the stock as we find it difficult to take a favourable view on Burberry''s turnaround, at least ahead of the next wave of product arrivals in store from September (which the...