Burberry’s revenue rose 2% on an underlying basis and grew by 21% to £663 million for the six months ended March 31 but the luxury brand warned that wholesale sales would slide further in the next six months.
Wholesale revenue, which accounted for a third of total sales in the second half ended March 31, dropped by 11% on an underlying basis. The group said this decline was due to reduced orders from its department store partners, particularly those in Spain, which showed the most significant slowdown.
Burberry warned that it was forecasting for wholesale revenue to be down by about 25% for the six months to September 30. It said about 15% of that could be attributed to the closure of its Thomas Burberry label and the rationalisation of its stockist base in Europe.
Retail sales rose 14% in the second half but dipped 0.5% on a like-for-like basis. However fourth quarter like-for-like sales were ahead 3%.
Overall Burberry said it would meet City profit forecasts for the current year.
Burberry chief executive Angela Ahrendts said: “Burberry made good progress in the second half. During the period, we intensified innovation in core outerwear and accessory categories, continued to improve inventory management and advanced execution of our cost efficiency programme.
She added: “Entering the new year, we believe the Burberry brand and operations are well positioned to capitalise on available opportunities, with the goal of delivering sustainable long-term growth.”