Burberry Q3 retail revenue drops -2% as UK drags down performance

Retail revenue at British luxury house Burberry dropped -2% in the quarter ending 31 December 2017, though comparable store sales were up 2%.

The business recorded retail revenues of £719m, which was up 1% on an underlying basis and down -2% on a reported basis. Its EMEIA business was down by a low single digit percentage due to strong UK comparatives.

This time last year the UK was performing particularly well due to the slump in Sterling following the Brexit vote, which had encouraged strong tourist spending in London in particular. However year-on-year the UK market had dropped by a high single-digit percentage, its trading statement said. Both Continental Europe and the Middle East had improved.

The Americas grew by a low single-digit percentage with revenues remaining broadly flat. Burberry said it had experienced good direct-to-consumer growth in digital with AsiaPac leading the way, with circa 40% of all sales in the region now coming via mobile. Given the numbers reported today, the business is retaining its profit guidance for the full financial year and says it remains on track to deliver £60m in cost savings.

CEO Marco Gobbetti, who was been undertaking a review of Burberry's retail and wholesale operations in a bid to cement the brand's true luxury credentials, said: “We are making good progress embedding our strategic vision into the organisation and remain on track to meet our full year profit target. We are building on strong foundations and are fully focussed on the successful delivery of our multi-year plan to position Burberry firmly in luxury and deliver long-term sustainable value.”

As of 31 December, Burberry globally had 205 retail stores, 199 concessions, 57 outlets and 47 franchise stores.