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Burberry posts double-digit growth in half year results

Burberry has clocked up double-digit growth across all regions in both retail and wholesale for the six months ended September, in half year results published today.

For the six months ended September 30 total revenue rose 29% to £830m, up from £641m in 2010.

Adjusted pre-tax profit shot up 26% to £161.6m, compared to £128.5m in 2010. Operating profit grew by 25%, reaching £162.1m, next to £129.7m over the same period last year.

The luxury group saw consistent growth across all four of its product divisions. Menswear grew by 37% and womenswear swelled by 35% over the half year, driven by strong retail performances in Burberry Prorsum and London, core outerwear and tailoring. Kidswear rose by 24% in retail and wholesale, and showed growth in outerwear and non-apparel.

There was a 45% boost in retail sales, accounting for almost two-thirds (64%) of revenue over the six months (compared to 57% in the same period last year).

Wholesale revenue went up by 9% and turnover from licensing operations was up by 4% over the half year.

Angela Ahrendts, Burberry’s chief executive officer, said: “Burberry has delivered a strong first half, reflecting our continued investment in innovative design, digital marketing and retail strategies.  This consistent performance, balanced across channels, regions and product divisions, is enabled by our closely connected global teams and creative thinking culture.”

Large leather goods made up half of non-clothing sales while revenue in men’s accessories was up by nearly 50% year-on-year. The category which sells mostly online, now makes up 15% of non-clothing mainline retail sales.

Driven by strong performances at department stores, wholesale revenues from North American markets rose by nearly 25% in the first half.

Emerging markets, including China, the Middle East and Latin America represented 19% of retail/wholesale revenue, up from 13% in the first half last year.

Responding to how the luxury brand would handle a downturn akin to that of 2008, Ahrendts said, “We have a very seasoned executive team, we know exactly what levers to pull, but right now we’re intensely focussed on optimising brand potential.”

Chief financial officer, Stacey Cartwright, said compared to the old model, half of Burberry’s sales are now done through replenishment. She added: “We are in a much better place than we were three years ago.”

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