Burberry expects record profits after strong second half
Burberry said its full-year profits will be “at record levels” following a stronger than anticipated end to the year.
Burberry saw total sales rise 7% to £707m for the six months to March 31, with outerwear, footwear and accessories, including handbags and scarves, providing the strongest growth.
The luxury retailer and brand said it now expects pre-tax profits for the year to be slightly above current market consensus, which was around £196m before today’s figures were released.
Chief financial officer Stacey Cartwright said: “We expect profit to be up to record levels despite the challenging economic conditions.”
Burberry said the UK was among the best-performing markets, driven by spending from tourists. Its European sales, excluding the poor-performing Spain, were up 5% to £213m.
Burberry’s total retail sales rose 14% to £437m for the half. New space contributed 5% to this growth, with like-for-like store sales up 10%. Burberry said the growth was driven by full-price sales of spring 10 product and strong sales in full-price rather than outlet stores.
Total wholesale sales dropped back 7% to £217m, a decline that Burberry attributed to the closure of some speciality stores in Europe and the continued poor performance of Spain. Burberry said that excluding these factors wholesale grew by a mid single-digit percentage.
Burberry’s wholesale offer suffered less of a decline than the 10-12% the company had forecast. Burberry said this comparative recovery was driven by an increase in in-season ordering as consumer demand grew coupled with a drop in cancellations due to earlier deliveries.
Burberry’s licensing revenue was up 23% in the half but declined 6% on a constant currency basis. The strength of the yen during the period drove the reported figure up.