Burberry Q3 comparable sales decline by 9 percent

In the third quarter, Burberry Group Plc said, despite reduced operating hours and the closure of up to 62 stores, it achieved a high single-digit full-price sales increase. However, reported retail revenue fell 4 percent to 688 million pounds with Covid-19 related store closures averaging 7 percent impacting trading. The company said in a statement, due to the reduction in markdown periods and products as planned, overall comparable store sales were down 9 percent for the quarter.

“We saw a strong increase in full-price sales as our collections and communication resonated well with new, younger clientele as well as existing customers. Our localised plans and digital capabilities helped drive growth in rebounding markets and we implemented our planned reduction in markdown. While the short-term outlook remains uncertain due to Covid-19, we are well placed to accelerate when the pandemic eases,” said Marco Gobbetti, Chief Executive Officer of the company.

Burberry’s festive campaign with Marcus Rashford MBE boosts sales

The company added that its festive campaign, partnering with Marcus Rashford MBE, the English international footballer who has taken a prominent role against child poverty during the pandemic, and global charities championing youth-related causes gained positive consumer response. In addition, as part of our focus on local Chinese consumers, the company launched Lunar New Year capsule in Mainland China at the end of December supported with a campaign and film “A New Awakening”.

Burberry saw its new collections drive double-digit growth within full-price sales. Both outerwear, which was a key focus of the festive campaign, and leather goods grew by low teens in full-priced sales in the period.

Additionally, digital innovations such as pop-ups and local activations on its web platform supported more than 50 percent full-price growth in the channel.

Burberry reports sales rise in Asia Pacific

The company reported 11 percent rise in Asia Pacific comparable store sales with full-price sales ahead of Q2 FY2021 across the region. Mainland China saw strong double-digit growth, while full-price sales increased at a level well above the Mainland China comp growth and strengthened over the prior quarter. The company said, Korea continued to perform well with comparable store sales up mid-teens including a higher growth in full-price sales, significantly ahead of Q2, while Japan and South Asia Pacific continued to be affected by the limited tourist traffic and Covid-19 related store closures.

EMEIA comparable store sales fell by 37 percent and continued to see much lower tourist demand. In addition, the region saw the biggest swing in store closures moving from 5 percent of stores closed in Q2 to an average 19 percent in Q3 FY2021. Continental European markets saw a small increase in domestic customer demand.

Americas comparable store sales fell 8 percent with full-price revenues up mid-teens, offset by the planned material reduction in markdowns.

Burberry expects the underlying performance in the fourth quarter will show a continuation of progress on strategic priorities. The company currently has 15 percent of stores closed and 36 percent operating with reduced hours or restrictions and an uncertain trajectory given the spread of the more transmissible new variants of Covid-19. Given this outlook, it expects trading will remain susceptible to regional disruptions. In terms of full year trading, notwithstanding any incremental lockdowns, Burberry expects gross margins to benefit from positive full-price, regional and channel mix and lower stock provisions.

Picture:Burberry news