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Burberry delivers robust first quarter revenues
12
Jul '12
Burberry Group Plc releases First Quarter trading update and Interim management statement.

Highlights

  • Total revenue £408m, up 11% underlying
  • Retail revenue £280m, up 14% underlying

- 6% comparable store sales growth

- Led by UK, France, Germany and Greater China

  • Wholesale revenue £102m, up 9% underlying

- Benefiting from earlier deliveries

- Consistent with mid single-digit % underlying growth expected in H1

- Including planned rationalisation in US and Europe

  • Licensing revenue £26m, down 5% underlying

- Q1 impacted by phasing of licence terminations

- Full year still expected to be broadly unchanged year-on-year

  • Further strategic and operational progress

- Continued elevation of core outerwear and large leather goods

- Strong growth in men’s tailoring and accessories

- Six mainline stores opened

- Including fourth store in Brazil and Russell Street in Hong Kong

- Investment in flagship markets continues

- Key openings later this year in London, Milan, Chicago, Hong Kong and Shanghai

Angela Ahrendts, Chief Executive Officer, commented:

“With continued brand momentum, Burberry has delivered a robust first quarter.  Revenue was up 11% against a more challenging external environment.   Sales in retail, now about 70% of the business, increased by 14%, with initiatives to elevate brand equity balanced by improved store productivity and new space.

Building on our balanced business model and strong operational foundation, we continue to invest in our retail, digital and marketing strategies to drive long-term sustainable growth, while remaining responsive to the changing external environment.”

Retail

Retail sales in the first quarter increased by 14% at constant and reported FX.  Within this, comparable store sales growth was 6%, with the balance from new space.

In mainline, there was a further increase in average selling prices, driven by product innovation, a higher penetration of Burberry Prorsum and London and rationalisation of opening price point products in core outerwear and accessories.  Men’s tailoring and non-apparel again performed strongly, as did new merchandising strategies in soft accessories.

Within the comparable store sales growth, there was strong mainline growth in the UK, France, Germany and Greater China, while Italy and Korea remained weaker markets.  Mainland China delivered double-digit comparable growth, with particular strength in Beijing.  Two large flagships in London and Chicago are due to reopen later this year.

During the first quarter, Burberry opened six mainline stores including the fourth store in Brazil (JK Iguatemi mall in São Paulo) and Russell Street in Hong Kong, and closed two.  In the year to 31 March 2013, a 12-14% increase in average retail selling space is planned, with a shift from smaller to larger format stores.

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