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Burberry H2 retail sales up 3 percent

Burberry has reported retail sales growth of 3 percent underlying and 19 percent at reported FX to 1,268 million pounds (1,625 million dollars) for the period ended March 31, 2017. Comparable sales rose 3 percent for the second half.

“In an uncertain environment, we continue to take action to strengthen the brand and reposition Burberry for growth. The outperformance of fashion and the strong customer response to new products underline our renewed creative momentum. I am delighted that Marco and Julie have now joined the business,” said Christopher Bailey, Chief Creative and Executive Officer, Burberry in a statement.

Highlights of comparable sales by region

The company reported low single-digit growth in Asia Pacific with Mainland China delivering high single-digit percentage growth, accelerating through the half, but Hong Kong declined, experiencing negative footfall only partially offset by improved conversion. Korea, Burberry’s third largest market in Asia, declined, which the company said was due to both the macro environment and its actions to reduce promotional activity.

Burberry saw double-digit percentage growth in EMEIA with positive performance in the UK and improved trading in Continental Europe, particularly France, while the company said, Middle East remained challenging. Americas witnessed a mid single-digit percentage. The company said, while relative strength of the US dollar drove a strong increase in sales from US customers abroad, demand at home reduced (both domestic and tourist).

Digital growth, Burberry added, reflected strategic focus and investment. With strong traffic and improved conversion, mobile delivered the majority of the growth, up 50 percent year-on-year. Enhanced local website in China posted positive results with a near doubling of direct to consumer sales.

Wholesale declined 13 percent in H2

In line with guidance, the company said, wholesale revenue was down 13 percent underlying or down 1 percent at reported FX, with over half of the decline from beauty. Burberry added that reflecting the rationalisation of distribution in key markets and distributor de-stocking, beauty revenue declined by about 20 percent underlying.

Primarily reflecting the planned expiry of the Japanese Burberry licences, as the company moved to direct retail operation, licensing revenue declined by 38 percent underlying.

Burberry expects total underlying wholesale revenue in the first half of FY 2018 to be down by a mid single-digit percentage, which reflects some expected business disruption for Beauty. Excluding this, underlying wholesale revenue is expected to be broadly unchanged year-on-year against 217 million pounds (278 million dollars) reported in H1 2016/17. Total underlying licensing revenue for FY 2018 is expected to be up 20 percent year-on-year.

Picture:Burberry website