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Burberry H1 sales back to pre-Covid levels

Lauretta Roberts
11 November 2021

Burberry sales are back at pre-Covid levels with the British luxury house reporting a 45% uplift in revenue in the 26 weeks to 25 September to just over £1.2 billion.

Adjusted operating profit hit £196 million, up from £56 million, while comparable retail sales were up 37%.

The fashion house attributed the strong performance to a focus on full-price sales and a strong showing in markets such as Americas, Mainland China and South Korea, which all posted double-digit growth.

Core product areas such as leathergoods and outerwear performed well and Burberry said its new store concepts, of which there are now 15 globally with a further 50 planned, were driving higher spend. Digital sales were also strong.

The business recently announced that Versace CEO Jonathan Akeroyd would be joining the business as CEO replacing Marco Gobbetti, who is leaving at the end of the year to return to his home country of Italy and take over the reins at Salvatore Ferragamo.

Akeroyd is a former CEO of Alexander McQueen and senior Harrods executive and is seen widely in the luxury industry as a strong appointment.

Chair Gerry Murphy said to the performance and change of CEO: "We have made strong progress in the half. Full-price sales are growing at a double-digit percentage, driving margin expansion and strong free cash generation. We are seeing an acceleration in performance in countries less impacted by travel restrictions and we remain confident of achieving our medium-term goals.

"I would like to thank Marco Gobbetti for his vision and leadership of Burberry’s transformation. We are very excited that Jonathan Akeroyd is joining as our new CEO in April to build on the strong foundations to accelerate growth and deliver further value for our shareholders.”

Analyst response:

Neil Shah, Director of Research, Edison Group

"This is a strong set of results from Burberry, which has seen H1 revenue recover to FY20 levels at £1,213 million, an increase of 45% at constant exchange rates. This was largely due to good mainline and digital full-price sales, as well as particular growth in regions including the Americas, China and South Korea. Adjusted operating profit saw a notable increase from H121, rising from £51 million to £196 million, and the Group recorded a 37% growth in retail comparable sales. The company declared an interim dividend of 11.6p.

"Burberry also made good progress with several of its strategic areas of focus. Thanks to closer management of its outlet business and an aim to exit mainline and digital markdowns, the Group saw a rise in full-price sales of 18% within comparable store sales growth of 1% over two years. The central categories of leather goods and outerwear also performed well, with leather showing double-digit full price sales growth over two years.  

"These results place Burberry in good stead as we enter peak retail season, despite the remaining economic uncertainty due to a variety of external factors. Shareholders will be pleased to see the company reiterate its progress towards becoming carbon neutral and source 100% renewable electricity by the end of FY22, particularly following its participation in a showcase held at COP26. Over the coming half, investors will keep a close eye on whether the Group maintains its performance before the arrival of Jonathan Akeroyd in April."

 


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