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The Burberry share price is falling. I’d buy this FTSE 100 stock now!

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The Burberry (LSE: BRBY) share price was on the back foot again this morning, despite soon-to-depart CEO Marco Gobbetti stating that the FTSE 100 company had made an “excellent start to the new fiscal year“. Should shareholders like me be running scared or loading up on the luxury brand’s stock? I think it’s the latter.

“Strong recovery”

Today, Burberry revealed that it had seen a “strong recovery” in the first quarter of its financial year. Positively, comparable stores sales were now “in line” with those before the pandemic struck. These were up 90% on those achieved over the same period last year and 1% on 2019. Retail revenue hit £479m in the 13 weeks to 26 June. 

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The biggest jump occurred in the Americas where sales jumped 341% on last year. In Europe, the Middle East, India and Asia, there was 146% growth, although fewer tourists visiting its stores thanks to travel restrictions continues to be a problem. Having recovered quickly from the pandemic, sales in the Asia Pacific region were 27% higher.

In line with many other businesses, Burberry also saw “excellent growth” online. Here, full-price sales were more than double those from 2019. In addition to this, the company stated that it had received an “excellent response” to its new handbag campaign featuring influencer Kendall Jenner. Full-price sales to new customers over the quarter rose by “mid-30%s“.

Looking ahead, Burberry chose to keep its FY22 guidance unchanged. The only exception is at its wholesale arm which is now predicted to rise 60% year-on-year due in part to a healthier order book. High single-digit revenue growth over the medium term “remains firmly on track“, it said. 

So, is now the time to load up?

As a holder, I’m naturally biased. However, I do feel that the recent weakness in the Burberry share price is an opportunity for me to snap up more shares in a company that I suspect will be worth a lot more in a few years. This is an iconic brand, hugely popular with increasingly affluent (and environmentally-conscious) consumers, particularly in countries like China and Korea.

Naturally, there’s are a few hurdles ahead. The most obvious of these is finding a new leader. The news of the forthcoming departure of Gobbetti has hit sentiment and exposed a lack of succession planning in Burberry’s ranks. It’s also thrown into question the company’s ability to complete its turnaround without his influence.

Other things that may be troubling investors include the fact that 35% of Burberry’s stores are still operating on reduced hours. The ongoing travel restrictions aren’t helping either. 

I’d buy the dip

Ultimately, I’m confident a suitable replacement will be found. The concern that Burberry’s strategy will collapse due to one man’s departure is taking things too far. All management moves on eventually. As usual, the market simply hates uncertainty.

In my opinion, the time to buy a quality company’s stock is when it’s on sale due to a temporary setback. While it could take a while for the Burberry ship to steady, I believe it will. As such, I would have no issue adding to my holding today.

For me, the main worry is not Covid-19, nor the loss of a CEO. It’s that Burberry will be taken out by a suitor at a price that doesn’t fully reflect what I believe to be its true value.

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Paul Summers 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.

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