Mulberry picks up after first half wobble

Luxury fashion group Mulberry said it was encouraged by second half revenue as retail sales blossomed after first half profit was hit by increased operating costs.

The leather goods firm, which issued a profit warning in October after a slowdown in sales across Asia and costs related to a reduction in its wholesale business, said pre-tax profit fell to £10m for the six months ended September 30th 2012 from £15.6m the year before. Operating costs rose £4.6m.

Revenue for the period increased to £76.5m from £72.3m before.

Retail revenue rose 13% to £46.5m while like-for-like sales advanced 7% in the first half. Online revenue soared 44%. Wholesale revenue fell 4% to £30m, reflecting account changes and a more challenging environment, Mulberry said.

The group said retail revenue for the nine weeks to December 1st 2012 jumped 19% while like-for-like sales rose 11%.

"Although dependent upon Christmas trading, full year revenue and profit are anticipated to be in line with market expectations," the group said in a company update.

Chief executive Bruno Guillon commented: "Mulberry has delivered 6% sales growth for the period. The UK retail business and key wholesale accounts have continued to perform well in the context of a challenging economic environment."

UK retail sales rose 9% to £39.2m while international retail sales gained 40% to £7.3m.

"The international retail rollout is on track with 17 to 20 new store openings expected for the full year," it explained.

Mulberry is maintaining a full year dividend of 5p and is not recommending an interim dividend payment.

"We currently anticipate full year revenue and profit to be in line with market expectations. We remain confident in the long term opportunity and outlook for the business," Mulberry said.

CJ