Burberry posts sales up 1% in tougher than expected market
Burberry posted sales up 1% to £603m in the three months to 31 December 2015, despite the challenging trading conditions in luxury and a slump in the key market of Hong Kong.
The performance represented a flat performance on a like-for-like basis year-on-year, however it is a marked improvement on the previous three-months (Burberry's quarter 2) which saw sales drop 4%. If the troublesome market of Hong Kong and Macau were stripped from the numbers, sales would have been up 3%.
Asia-Pacific sales were down “mid-single digit” overall for the quarter but Burberry reported that mainland China, where the slowdown in luxury has been a point of pain for many brands, had returned to growth.
In EMEIA, sales up “mid-single digit” with strong performances in particular in Italy, Spain and Germany. The Americas achieved “marginally positive growth”.
The group reported that digital had outperformed in all regions. CEO Christopher Bailey has gained a reputation for his innovative digital initiatives, the brand’s SS16 collections were previewed on Snapchat while it teamed up with Apple TV for its recent AW16 London Collections Men (LCM) show.
“In a tougher environment than expected, our sustained focus on growth and cost control drove a number of positive results over the quarter, including the outperformance of digital and a return to growth in mainland China,” said Bailey.