Burberry disappoints

Licensing revenue was down year-on-year at Burberry but otherwise the luxury brand powerhouse trundled on in its fiscal first quarter.

Total revenue in the three months to the end of June was up 11% to £408m from £367m in the corresponding period of 2011.

Retail revenue was up 14% to £280m from £245m the year before, with the UK, France, Germany and Greater China leading the way. Like-for-like sales were up 6% year-on-year.

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"Sales in retail, now about 70% of the business, increased by 14%, with initiatives to elevate brand equity balanced by improved store productivity and new space," said Angela Ahrendts, Burberry's Chief Executive Officer.

Wholesale revenue rose 8%, or 9% on a constant currency basis, to £102m from £95m a year earlier, but licensing revenue eased 2% (-5% on a constant currency basis) to £26m from £27m in the corresponding period of 2011, largely as a result of the the termination of certain non-apparel licences in Japan in June 2011

Performance in the Wholesale division was consistent with the mid single-digit percentage underlying growth the group had expected in the first half of the fiscal year, while the Licensing division's revenue is still expected to be more or less unchanged over the full year.

"Building on our balanced business model and strong operational foundation, we continue to invest in our retail, digital and marketing strategies to drive long-term sustainable growth, while remaining responsive to the changing external environment," Ahrendts said.

The market was disappointed with the update, however, with the shares down 60p to 1,224p in the first 15 minutes of trading.

JH