Burberry retail success in challenging environment

Burberry's retail operation enjoyed a strong run up to Christmas but the company took a hit in its wholesale division and said the global environment would remain challenging.

Burberry's retail operation enjoyed a strong run up to Christmas but the company took a hit in its wholesale division and said the global environment would remain challenging.

The luxury fashion brand said total revenue rose 9% to £613m in the three months to December 31st.

Retail revenue, which makes up the bulk of sales, rose 13% to £464m on an underlying basis, driven by customers choosing the more expensive items and by a strong performance in outerwear.

However, wholesale revenue fell by 5% to £120m on an underlying basis in the third quarter.

For the second half of its financial year Burberry now expects underlying wholesale revenue to be down low to mid single-digit percentage year-on-year, compared to a previous estimate that it would be broadly unchanged.

The firm said this reflected lower sales to small specialty accounts in Europe.

The United States, Asia Travel Retail and Emerging Markets are expected to continue to grow.

The company, which has struggled to maintain sales in the Far East, saw the Asia Pacific region post the strongest rise in revenues, up 16% to £242m on an underlying basis.

This compared with growth of 4% in Europe and and the Americas.

Chief Executive Angela Ahrendts the firm had benefitted from a particularly strong week in the run up to Christmas.

"In an otherwise difficult quarter, core outerwear, mens and digital all outperformed," she said.

"We expect the external global environment to remain challenging, but see continued opportunities to drive productivity in our existing business, while investing for growth in under-penetrated regions, product categories, channels and mediums."

Recommended

Why it pays to face up to your investment mistakes
Investment strategy

Why it pays to face up to your investment mistakes

Buying stocks can be a complicated business. But selling stocks can be tricky, too – even if you sell for the right reasons. Max King explains how to …
17 Sep 2021
Share tips of the week – 17 September
Share tips

Share tips of the week – 17 September

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
17 Sep 2021
Royal Mail will deliver for investors – here's how to play it
Trading

Royal Mail will deliver for investors – here's how to play it

Royal Mail Group has found its feet in the past 18 months and looks cheap. Matthew Partridge looks at how to trade the shares.
14 Sep 2021
The times may be changing, but don’t change how you invest
Small cap stocks

The times may be changing, but don’t change how you invest

We are living in strange times. But the basics of investing remain the same: buy fairly-priced stocks that can provide an income. And there are few be…
13 Sep 2021

Most Popular

The times may be changing, but don’t change how you invest
Small cap stocks

The times may be changing, but don’t change how you invest

We are living in strange times. But the basics of investing remain the same: buy fairly-priced stocks that can provide an income. And there are few be…
13 Sep 2021
Two shipping funds to buy for steady income
Investment trusts

Two shipping funds to buy for steady income

Returns from owning ships are volatile, but these two investment trusts are trying to make the sector less risky.
7 Sep 2021
Should investors be worried about stagflation?
US Economy

Should investors be worried about stagflation?

The latest US employment data has raised the ugly spectre of “stagflation” – weak growth and high inflation. John Stepek looks at what’s going on and …
6 Sep 2021