Burberry retail revenues up 17 percent in Q1

Thursday, 10 July 2014

REPORT_ Retail revenue of Burberry in the first quarter were 370 million pounds (634.8 million dollars), up 17 percent underlying or up 9 percent at reported FX. Comparable sales went up 12 percent. Company witnessed a double-digit growth in Asia Pacific and Americas and low single-digit growth in EMEIA. Double-digit growth was also seen across all three main product categories.

Commenting on the financial update, Christopher Bailey, Chief Creative and Chief Executive Officer, said, “This first quarter performance reflects our focus on striving to give customers the best possible experience of the Burberry brand through ongoing investment in retail, digital and service, both on and offline. The 12 percent increase in comparable sales demonstrates our teams' success in unlocking the benefits of these investments, as we continue to concentrate on the things we can control in an uncertain external environment.

In mainline, there was double-digit growth in men’s, women’s and accessories, with balanced performance across fashion and replenishment. Men’s tailoring, women’s Spring/Summer 2014 Prorsum and iconic rainwear - all performed well. In accessories, solid leather continued to increase its share of the large leather goods mix.

Double-digit comparable sales growth in Asia Pacific was led by mainland China and Hong Kong and Americas. Low single-digit comparable sales growth in Europe, Middle East, India and Africa (EMEIA) reflected a softening in major markets. During the first quarter, Burberry opened four mainline stores -one in Edinburgh and three airport stores in London Heathrow, Madrid and Milan and closed three.

In FY 2015, net new space is still expected to contribute low to mid-single-digit percentage growth to total retail revenue. Excluding Beauty, Burberry continues to expect wholesale revenue at constant exchange rates to be broadly unchanged in the six months to 30 September 2014. For Beauty, the fifth product division, wholesale revenue is still expected to grow by about 25 percent at constant exchange rates in FY 2015. If exchange rates remain at current levels, as an indication, rebasing FY 2014 retail/wholesale profit for current effective exchange rates would now reduce reported profit by about 55 million pounds (94.3 million dollars) and adjusted operating margin from 17.5 percent to around 16 percent.

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