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Burberry reports 14 percent revenue rise in Q3

By FashionUnited

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REPORT_ Announcing its financial results for the three months ending December 31, 2013,

Burberry said that it witnessed a retail revenue of 528 million pounds (867 million dollars), showcasing a rise of 14 percent. Company’s comparable sales increased 12 percent.

Commenting on the results, Angela Ahrendts, Chief Executive Officer of Burberry said, “In the all-important festive period, we are pleased with our 12 percent comparable sales growth, which was in line with our expectations. At current levels, exchange rates will be a significant headwind in the second half and beyond, and the macro environment remains uncertain, but we are confident that our proven strategies will continue to deliver long-term value for shareholders.”

Outerwear and large leather goods together contributed about half of mainline growth, and men’s accessories and tailoring saw strong growth too. The halo effect of the marketing campaign launching the Brit Rhythm for men’s fragrance helped Burberry Brit apparel increase penetration slightly, particularly in men’s wear and women’s outerwear. Scarves, small leather goods and beauty benefited from the co-ordinated festive offer across all customer touch-points.

Asia Pacific again delivered double-digit percentage comparable sales growth, led by Greater China and a continued improvement in Korea. Americas and EMEIA both delivered mid to high single-digit comparable sales growth. Performance was robust in the UK, France and Germany, while Italy remained weak. During the third quarter, Burberry opened a net five mainline stores including two in China, a fourth store in Mexico and the first Burberry Beauty Box in Covent Garden, London. In addition, one store and two concessions previously operated by a franchisee were acquired in Thailand.

In FY 2014, net new openings are planned by the company to contribute low to mid single-digit percentage growth to retail revenue. Excluding beauty, Burberry expects underlying wholesale revenue to increase by a mid to high single-digit percentage in the six months to March 31, 2014. In FY 2013, Burberry achieved an operating margin of 17.1 percent, excluding the benefit of a lower performance-related pay charge. For FY 2014, Burberry continues to aim for a modest increase from that level, although there will be a dilutive impact from beauty in this transitional year.

Burberry