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Burberry 3rd quarter revenue up 9%

Fashion retailer says it made £613m of revenues in the three months to December 31

Gulf News

London: British luxury brand Burberry beat forecasts with a nine per cent rise in third-quarter underlying revenue after a particularly strong week in the run-up to Christmas.

The 157-year-old seller of raincoats and leather goods, known for its camel, red and black check pattern, said on Tuesday it made £613 million (Dh3,616 million) of revenues in the three months to December 31.

That compared with analysts’ average forecast of £602 million, according to a company poll, and £574 million in the same period last year. However the group trimmed its wholesale revenue guidance for the second half after growth in the United States, Asia travel retail and emerging markets was more than offset by weaker European markets.

Last September Burberry sent shock waves through the luxury industry by warning of a broad-based slowdown in spending — particularly in China, which had been the driving force of a boom in demand for luxury goods. But it has calmed investors with subsequent statements.

Third-quarter retail revenue was up an underlying 13 per cent to £464 million, with scarves, men’s tailoring and accessories outperforming and the firm selling a higher proportion of goods from its top-end Prorsum and London lines.

Comparable store sales growth was six per cent versus analysts’ consensus forecast of a rise of two per cent and a second quarter increase of one per cent.

Wholesale revenue at £120 million was down an underlying five per cent and Burberry is now forecasting underlying wholesale revenue to fall by “a low to mid single-digit percentage” year-on-year in the second half, reflecting lower sales to small speciality accounts in Europe.

Its previous guidance was for a broadly unchanged performance.

Third-quarter licensing revenue was £29 million, up four per cent underlying.

“We expect the external global environment to remain challenging,” said Chief Executive Angela Ahrendts.

Shares in Burberry, up 18 per cent in the last three months, closed on Monday at 1,325 pence, valuing the business at £5.86 billion.