Burberry Retail Climbs 5% in Q3, Company Upgrades Full-year Guidance
LONDON — Burberry’s retail revenue rose 5 percent to 723 million pounds in the third fiscal quarter ended Dec. 25, with full-price sales gaining traction, and driven by new, young shoppers in markets including the Americas and Asia Pacific.
At constant exchange rates, retail revenue growth in the three months was 8 percent. The company said it now expects full-year adjusted operating profit to increase by about 35 percent at constant exchange compared with the prior year, barring any further changes in the external environment.
More from WWD
The upgrade in guidance is due to the surge in full-price sales, and currency headwinds which are set to be less severe than originally expected.
The negative impact of currency on year-end revenue is now set to be 79 million pounds, down from 100 million pounds. The impact of currency on adjusted operating profit is expected to be 27 million pounds, rather than 40 million pounds.
Burberry is also maintaining its medium-term guidance of “high-single-digit” top-line growth and “meaningful margin accretion” at constant exchange.
Burberry’s shares were up 5.6 percent at 18.53 pounds in mid-morning trading.
In the three-month, pre-holiday trading period, comparable store sales rose 7 percent on last year, but fell 3 percent compared with two years ago. Burberry said the decline was due to the planned exit from markdowns.
As reported, Burberry had been putting the focus on full-price sales under former chief executive officer Marco Gobbetti, who has since left the company to take the helm at Salvatore Ferragamo.
In the three-month period, full-price sales were up 15 percent year-over-year, and 26 percent compared with two years ago.
Burberry chair Gerry Murphy noted that full-price sales accelerated from the previous quarter, reflecting “a higher-quality business.” He said Burberry’s outerwear and leather goods “performed strongly as we continued to attract new, younger consumers to the brand.”
Burberry said full-price outerwear sales were up 38 percent compared with two years ago, while leather goods rose 29 percent compared with the corresponding period in 2019. Digital full-price sales also rose in the high double-digits compared with 2019.
Murphy noted that Burberry has been attracting “new, younger consumers,” who are driving “double-digit full-price sales growth across all product categories. Regionally, he said full-price comparable store sales were driven by “continued strong performance in the Americas, and a material sequential improvement in Asia Pacific as COVID-19 restrictions eased.”
In EMEIA, trends are improving despite an ongoing lack of tourism, Murphy added.
Despite the ongoing challenges of the external environment, Murphy said Burberry was “confident of finishing the year strongly and providing an excellent platform on which to build when our new CEO Jonathan Akeroyd joins in April.”
