Underlying sales growth slows at Burberry

Underlying revenue growth at luxury brand Burberry eased in the fourth quarter owing to a slowdown in growth at its Wholesale division.

Total revenue grew to £1,027m in second half ended March 31st, from £877m in the same period the year before and up 18% on an underlying basis. However, in the third quarter alone, underlying growth was 21%.

"With underlying revenue up 18% in the second half, we are pleased with Burberry's finish to the year across all channels, regions and product divisions. Looking ahead, while we remain vigilant about the external environment, our global teams continue to focus on optimising our core brand, digital and cultural initiatives, while investing to drive sustainable, profitable growth," said Chief Executive Officer Angela Ahrendts.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Underlying Retail sales growth was maintained at 23% from the third quarter to the fourth, while comparable store sales in the half increased by 12%, with the UK, France and Greater China remaining strong.

Retail sales accounted for 72% of total group revenue in the second half, well up on the 64% contribution in the first six months of the fiscal year.

Meanwhile, wholesale revenue growth increased by 7% in the second half as a whole, compared with the 15% growth seen in the third quarter. However, this was slightly better than expected with the group having said that it expected mid single-digit percentage growth, a rate which is expected to be achieved again this coming year.

"Growth was impacted by the planned shift from wholesale to retail in Saudi Arabia and Spain and further rationalisation of the brand's distribution in the United States and Europe," the company said.

BC