Burberry Group records retail revenue of £498 mn in Q1

July 27, 2019 - United States Of America

Burberry Group, a British luxury fashion house, reported retail revenue of £498 million in Q1 for the 13 weeks ending June 29, 2019, as compared to £479 million for same period in 2018. In June, the proportion of new product was around 50 per cent of mainline offer compared to 10-15 per cent in March. This improved comparable store sales growth to 4 per cent.

The region Asia Pacific grew by a high single-digit percentage driven by China up mid teens. EMEIA grew by a low-single digit percentage supported by tourist spend, which particularly benefited the UK. The Americas was flat, the US grew by a low-single digit percentage but Canada was negatively impacted by a later markdown period, said Burberry in a press release.

Men’s and women’s apparel grew by a double-digit percentage. Accessories declined with the benefit from new styles more than offset by the softer performance of lines from previous collections.

In retail, 23 stores incorporated Burberry’s new creative vision by the end of the quarter and a cumulative nine of the 38 smaller, non-strategic stores previously announced for rationalisation have now been closed. Meanwhile, in wholesale, the company continued to rationalise space in non-luxury US doors. Finally, it continued to innovate with sustainable raw materials, introducing Econyl, a yarn created from nylon waste in landfill and ocean plastics into men’s and women’s outerwear.

The company continued to build brand heat and shift consumer perceptions with improved social media traction, press coverage and organic endorsement from influencers.

“This was a good quarter in our multi-year journey to transform Burberry. We increased the availability of products designed by Riccardo, while continuing to shift consumer perceptions of our brand and align our network to our new creative vision. The consumer response was very promising, delivering strong growth in our new collections. We are on track with our plans and we confirm our outlook for FY 202,” said Marco Gobbetti, chief executive officer. “Excellent consumer response to Riccardo Tisci’s product with new collections delivering strong double-digit percentage growth compared to prior year equivalent collections, in line with our expectations.”

For FY 2020, the company maintains its FY 2020 guidance of broadly stable top line and operating margin at CER including cumulative cost savings of £120 million. As previously announced, it anticipates a more pronounced weighting of operating profit in H2 relative to H1 comparator in the prior year. (PC)