Revenue boosted by healthy revenue growth in China, but weak performance in the Americas sends shares tumbling
18 May 2023 - 18:20
bySuban Abdulla
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A Burberry store at a shopping mall in Beijing. The British fashion brand said on Thursday that sales in China, its biggest market, rose 13% in the three months to April 1. Picture: REUTERS/Tingshu Wang
British luxury fashion brand Burberry on Thursday reported stronger-than-expected fourth-quarter sales, driven by a rebound in China, but continued weakness in the US sent its shares down sharply.
Comparable store sales at the FTSE 100 group rose 16%, accelerating from 1% in the third quarter and above a company compiled consensus of 14%. Sales in China, its biggest market, rose 13% in the three months to April 1.
China, which is showing signs of recovery after it dropped strict Covid-19 restrictions, accounted for 30% of the business.
Still, shares in the group were down 5.8% in afternoon trading after the Americas continued to be a weak spot, with quarterly sales declining 7% in the review period. Burberry maintained its 2024 and medium-term targets while stating it was "mindful of macroeconomic and geopolitical environment".
The company’s shares had soared to record highs in recent months on optimism about the recovery in China.
CEO Jonathan Akeroyd said the financial performance was supported by a recovery in mainland China and "good progress" in Burberry’s core leather goods and outwear offerings.
Europe performed strongly, with sales up 27% in the period, helped by a rise in tourists from the Middle East and Americas.
Thursday’s results follow creative director Daniel Lee’s first collection at London Fashion week in February as well as the launch of a new logo and campaign.
The company said a new collection, which includes shoes and bags, will land in stores and online in September.
Leather goods sales were up 12% in the 2023 financial year and 15% higher in the final quarter, boosted by sales of the Lola and Frances women’s bags as well as the launch of the vintage Burberry Check line.
Full-year revenues at the 167-year-old business rose 7% to £3.1bn, in line with expectations and up from £2.83bn a year earlier.
Burberry’s luxury rivals LVMH and Hermes have also reported a bounce in first-quarter sales due to a recovery in China and wider Asian markets.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Burberry fashions strong fourth-quarter sales
Revenue boosted by healthy revenue growth in China, but weak performance in the Americas sends shares tumbling
British luxury fashion brand Burberry on Thursday reported stronger-than-expected fourth-quarter sales, driven by a rebound in China, but continued weakness in the US sent its shares down sharply.
Comparable store sales at the FTSE 100 group rose 16%, accelerating from 1% in the third quarter and above a company compiled consensus of 14%. Sales in China, its biggest market, rose 13% in the three months to April 1.
China, which is showing signs of recovery after it dropped strict Covid-19 restrictions, accounted for 30% of the business.
Still, shares in the group were down 5.8% in afternoon trading after the Americas continued to be a weak spot, with quarterly sales declining 7% in the review period. Burberry maintained its 2024 and medium-term targets while stating it was "mindful of macroeconomic and geopolitical environment".
The company’s shares had soared to record highs in recent months on optimism about the recovery in China.
CEO Jonathan Akeroyd said the financial performance was supported by a recovery in mainland China and "good progress" in Burberry’s core leather goods and outwear offerings.
Europe performed strongly, with sales up 27% in the period, helped by a rise in tourists from the Middle East and Americas.
Thursday’s results follow creative director Daniel Lee’s first collection at London Fashion week in February as well as the launch of a new logo and campaign.
The company said a new collection, which includes shoes and bags, will land in stores and online in September.
Leather goods sales were up 12% in the 2023 financial year and 15% higher in the final quarter, boosted by sales of the Lola and Frances women’s bags as well as the launch of the vintage Burberry Check line.
Full-year revenues at the 167-year-old business rose 7% to £3.1bn, in line with expectations and up from £2.83bn a year earlier.
Burberry’s luxury rivals LVMH and Hermes have also reported a bounce in first-quarter sales due to a recovery in China and wider Asian markets.
Reuters
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