Burberry reports £723 revenue in Q3 as full price sales rise
Burberry has reported full-price comparable store sales increase of 26% against Q3 of fiscal year 2020 and 15% against the prior year, in its third quarter trading update.
For the 13 weeks period ending 25 December, the British house reported third quarter revenue of £723m, up by 5% compared to same period last year.
However, comparable store sales were down 3% against the previous quarter and down 9% compared to the same period in the 2020.
The company added that a £150m share buyback programme is on course for completion before the end of the year. This week, Burberry announced the refinancing of its revolving credit facility to £300m sustainability linked loan.
Assuming no further changes in the external environment, Burberry said it expects current year adjusted operating profit to grow in the region of 35% compared with the prior year.
Gerry Murphy, Burberry Chair said: "Full-price sales continued to grow at a double-digit percentage compared with two years ago, accelerating from the previous quarter and reflecting a higher quality business. Our focus categories outerwear and leather goods performed strongly as we continued to attract new, younger consumers to the brand.
"Despite the ongoing challenges of the external environment, we are confident of finishing the year strongly and providing an excellent platform on which to build when our new CEO Jonathan Akeroyd joins [from Versace] in April."
Deborah Aitken, Bloomberg Intelligence Luxury Goods Analyst said of the results: “The quality of Burberry's fuller-price 3Q sales, enabling a sizable profit beat in fiscal 2022 vs. consensus demonstrates the strategy is working to reduce discounts and build luxury-brand equity – despite revenue still being below pre-pandemic levels. Guidance for adjusted operating-profit growth of 35% at constant rates compares with consensus' 19% on a reported basis.
“Key strategy initiatives to enhance Burberry's brand probably won't be delayed long, with seasoned successor Jonathan Akeroyd taking over as CEO in April following Marco Gobbetti's December exit. The outlook has improved on accelerating fuller pricing, with all regions in pick-up mode, despite tourists still missing from Europe. Management is gradually securing Burberry's rising luxury status, led by designs and a retail-store expansion and overhaul. A reduction in markdowns still needs work, though profitability is improving. The solid cash flow and balance sheet support dividends and share buybacks.”
At 25 December 2021, Burberry had 218 retail stores globally, 150 concessions, 58 outlets and 39 franchise stores, excluding pop up stores.