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Burberry sales up 24% in first quarter

Burberry reported a 24% hike in revenue to £291m for the three months to June 30 with a strong performance across both retail and wholesale.

The luxury retailer and brand said retail revenue was up 21% on an underlying basis to £171m. New store sales generated 6% of this growth.

Like-for-like store sales were up 10% for the period, with increased full-price sell-through driven by the introduction of Burberry’s ‘iconic pricing’ policy whereby iconic lines such as its trench coats are never discounted.

Burberry’s best-selling categories were outerwear and non-apparel, with its new Smoke Check luggage collection performing particularly well.

Sales were up across every region except Spain, where the company continues to restructure. The UK, Italy, Germany, Hong Kong and Taiwan were the best performing regions.

Burberry said its digital initiatives, which included live streaming of catwalks with a ‘click to buy’ facility boosted traffic to both its website and its bricks-and-mortar stores.

Burberry increased its selling space by 8% in the first quarter and opened eight stores including its first in Brazil and two in India to take its total store number to 139. Burberry plans to increase retail space by 10% for the full-year, weighted towards the second half.

Wholesale revenues were up 46% to £87m driven by more regular monthly deliveries prompting stockists to order earlier. Burberry forecast a continued growth in wholesale revenue by a “high teen percentage for the six months to September 30.

Licensing revenues for the period rose 14% to £24m and benefited from a favourable yen hedge rate, which Burberry said would continue to impact for the rest of the first half.

Despite the strong performance, Burberry expects full-year licensing revenue to decline by 5-10% following the termination of its final menswear licences and its Japanese leather goods licence.

Burberry chief executive Angela Ahrendts said: “With double-digit sales growth in both retail and wholesale, Burberry has delivered a strong start to the year. The clear momentum in the business and our robust financial position together reinforce our confidence to increase investment for the future, while continuing to enhance the brand.

“We plan to open between 20 and 30 stores in the current financial year, predominantly in the Americas and Asia Pacific. Our continued investment in industry-leading digital, service and product initiatives will further increase awareness, traffic and sales, to drive long-term profitable growth for all our stakeholders.”

 

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