Raising guidance ahead of FY release Last Friday, Burberry issued an unscheduled Trading Update, stating that since December, it has continued to see a strong rebound and now it expects revenue and adjusted operating profit to be ahead of consensus expectations. Comparable store retail sales growth in Q4 FY2021 is expected to be in the range of +28% to +32%. For the full year, the company expects group revenue to decline by -10% to -11% and the adj. operating margin to be in the range of 15.5%-16.5%. The strength in the top line comes from full-price sales and the following countries: China, South Korea and the US. Europe is still weak due to lack of tourists. So far, around 15% of the store base is still closed. We upgrade our estimates by 34% to March-21 and 16% to March-22 We have lifted our numbers following the Trading Update. We now factor in wholesale revenues up MSD in 2H 21 (+6% vs. -14% previously) and have left LFL unchanged (+32% in 4Q and -10% for FY 2021). We have then increased gross margin to 69% (from 63.4%), thanks to the higher contribution of full-price sales, and EBIT to GBP 383m, implying a margin of 16.4% from 13.3% previously), with overall opex around GBP 1.2bn. Also, our tax rate goes from 30% to 25%. This results in an EPS increase of 34% for the year to March-21. We have also lowered our tax rate for the following years (from 30% to 22% for the years to 2023). We raise our TP to GBP21 and keep our Neutral rating unchanged Following the estimate upgrade, we have also increased our TP to GBP 21. Burberry shares are up c. 20% YTD, the strongest in European Soft Luxury (+11%), after Hugo Boss. On consensus numbers, Burberry trades on a 1-year forward PE of 27x, implying a premium of over 45% vs. its historical average of 19x. The next potential catalyst is on 13th May, when Burberry will unveil its March-21 year-end results.