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

Share tips of the week – 9 December
Share tips

Share tips of the week – 9 December

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
9 Dec 2022
The top funds to invest in now
Funds

The top funds to invest in now

As market volatility continues, here are the top funds, stocks and investment trusts investors are putting their money into, according to one investme…
2 Dec 2022
7 sin stocks to buy yielding up to 8%!
Share tips

7 sin stocks to buy yielding up to 8%!

Sin stocks don’t have the best reputation, but when it comes to investment returns, they’re certainly worth a closer look.
2 Dec 2022
Share tips of the week – 2 December
Share tips

Share tips of the week – 2 December

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
2 Dec 2022

Most Popular

Is it cheaper to leave the heating on low all day?
Personal finance

Is it cheaper to leave the heating on low all day?

The weather is getting colder and energy bills are rising, but is it really cheaper to leave the heating on low all day or should you only turn it on …
1 Dec 2022
Radiator vs electric heater – which is cheaper?
Personal finance

Radiator vs electric heater – which is cheaper?

We compare the costs, pros and cons of radiators and electric heaters and see which one will help keep your energy bill as low as possible.
28 Nov 2022
The pros and cons of smart meters – should you switch?
Personal finance

The pros and cons of smart meters – should you switch?

A smart meter can help you keep tabs on your energy usage, but is it better than a regular meter? We take a look at smart meters vs regular meters.
2 Dec 2022