Address

Precise Investors

Saturday, February 27, 2021
Trading

Burberry sales fall in the third quarter

Burberry

Retail revenue fell 4% in the three months to the end of December amid coronavirus-related store closures

Burberry sales fell in the third quarter as the impact of Covid-19 and fewer price cuts offset strong sales of full-price items boosted by its association with footballer Marcus Rashford.

Retail revenue fell 4% to £688m in the three months to the end of December as coronavirus-related store closures averaged 7%. Comparable store sales fell 9% as Burberry reduced markdowns but full-price sales rose at a “high single-digit” pace.

The FTSE 100 fashion brand said full-price sales were driven by new, younger customers and repeat purchases, helped by a successful festive campaign featuring Marcus Rashford, the Manchester United player who campaigns against child poverty in the UK.

The company said 15% of its branches were closed with 36% operating with reduced hours. Digital full-price sales rose by more than 50% with growth stronger in China. Burberry said fourth-quarter performance would show continued progress.

Sales in the Asia Pacific region rose 11% with strong growth in Mainland China and Korea but sales in Europe, the Middle East and other markets dropped 37% because of store closures and fewer tourists. Sales in the Americas dropped 8% as fewer markdowns more than offset a “mid-teen” rise in full-price purchases.

Burberry shares rose 5% to £18.25 and were the biggest gainers in the FTSE 100 index.

The luxury clothing maker was attempting to overhaul its business when the Covid-19 pandemic struck, initially hammering sales in China, its biggest market, and other Asian countries. Chief Executive Marco Gobbetti is revamping collections to appeal to younger customers and reducing Burberry’s reliance on price reductions.

The company said: We expect trading will remain susceptible to regional disruptions as we close the financial year. In terms of full year trading, notwithstanding any incremental lockdowns, we expect gross margins to benefit from positive full-price, regional and channel mix and lower stock provisions. Cost savings are currently running in line with plan and we are on track to see inventory below last year’s levels.

Important:

The articles are for information purposes only and Precise Investors shall not be held responsible for any errors, omissions or inaccuracies within it. Any rules or regulations mentioned within the website are those relevant at the time of publication and may not be the most up-to-date.

Precise Investors does not endorse any of the products or services that appear on it or are linked to it and are not liable for any action that you may take as a result of the content of this website, or losses or damage you may incur doing so.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Please remember that investments of any type may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

Leave a Reply

5 × five =