Burberry hails Retail performance in second half

Iconic British luxury brand Burberry has reported a decent rise in underlying revenue in the second half as strong growth in Retail continued to offset a weaker performance in Wholesale.

Iconic British luxury brand Burberry has reported a decent rise in underlying revenue in the second half as strong growth in Retail continued to offset a weaker performance in Wholesale.

Revenues totalled £1,116m in the six months to March 31st, up 9.0% an underlying basis, with Retail now accounting for 75% of total sales, up from 65% in the first half.

The quarterly breakdown showed that growth rates in Retail (and across the wider group) had accelerated in the final three months of the year.

The company opened 10 more stores during the period, including a flagship store in Chicago and a menswear store in Knightsbridge, London. Two shops were closed, bringing to total to 206 by the year-end, up 14 on last year.

Retail revenues rose 13% year-on-year with the key Asia Pacific region leading the way, especially Greater China. Burberry said that it saw double-digit growth in all four product divisions in Retail while outerwear, mens and digital all outperformed.

"With three-quarters of our revenue now generated in retail, we are pleased with the 13% growth in this channel in the second half, driven by continued innovation in product, marketing and customer service, especially over Christmas and Chinese New Year," said Chief Executive Officer Angela Ahrendts.

Wholesale revenues on the other hand, fell 3.0% over the year to £220m, as expected, owing to weakness in the largest region, Europe. This division now only accounts for 20% of group sales, down from 29% in the first six months of the financial year.

Licensing revenue was up 3.0% at £56m, in line with guidance.

Next yearBurberry said that it plans to open a further 25 mainline stores in the year to March 2014 and close about 15, while opening 10 concessions and closing 10.

"Openings are biased towards the evolution of the portfolio in China and further expansion in Latin America. Following two years of above average space growth, net new openings are planned to contribute low to mid single-digit percentage growth to retail revenue in FY 2014," the firm said.

Wholesales revenues, excluding Beaty, are expected to fall by 10% in the first half of the current financial year (ending September 30th) with customers planning more conservatively for Autumn/Winter 2013 season.

Recommended

The MoneyWeek Podcast: picking stocks is fun, but you need to do your homework
Investment strategy

The MoneyWeek Podcast: picking stocks is fun, but you need to do your homework

John Stepek talks to Steve Clapham, investor, analyst and author of The Smart Money Method, about the dangers in picking individual stocks and why you…
8 Apr 2021
BP looks set to return more money to shareholders as it beats expectations
Energy stocks

BP looks set to return more money to shareholders as it beats expectations

Oil major BP is to embark on a share buyback programme after significantly reducing its debts. Saloni Sardana looks at what it means for your portfoli…
6 Apr 2021
Deliveroo has hit the market – but it’s not getting the warmest welcome
UK stockmarkets

Deliveroo has hit the market – but it’s not getting the warmest welcome

Food delivery company Deliveroo made its debut on the stockmarket this morning. But with the share price sliding by 30% straight away, it’s not made t…
31 Mar 2021
Three stocks to buy now that will come back stronger after Covid-19
Share tips

Three stocks to buy now that will come back stronger after Covid-19

Professional investor Ed Wielechowski of Odyssean Capital, chooses three compelling stocks that should thrive in a post-pandemic world.
29 Mar 2021

Most Popular

Lab-grown meat: how “moo’s law” will drive innovation
Soft commodities

Lab-grown meat: how “moo’s law” will drive innovation

Jim Mellon and Anthony Chow, co-founders of Aim-listed Agronomics, explain why they believe that “cellular agriculture” will benefit from massive long…
16 Apr 2021
The bitcoin bubble will burst: here’s how to play it
Bitcoin

The bitcoin bubble will burst: here’s how to play it

The cryptocurrency’s price has soared far beyond its fundamentals, says Matthew Partridge. Here, he looks at how to short bitcoin.
12 Apr 2021
Lab-grown meat: the new agricultural revolution
Soft commodities

Lab-grown meat: the new agricultural revolution

Vegan alternatives are taking off, but the future of food technology lies in lab-grown meat – cultivating steaks and burgers from animal cells, says A…
16 Apr 2021