UK: Asia growth boosts Burberry Q3 revenues
- Q3 retail revenues rose 14%
- Comparable store sales up 12%
- Asia Pacific led growth
Asia Pacific posted double-digit percentage comparable sales growth in the third quarter
UK luxury brand Burberry has reported a double-digit increase in third-quarter retail revenues, bolstered by growth in Asia Pacific and higher online sales.
Retail revenues grew 14% to GBP528m (US$867m) during the three months to 31 December, while comparable store sales were up 12%.
The company today (15 January) said the key growth drivers remained consistent with previous periods. Traffic remained weak offline but grew online, reflecting evolving consumer behaviour. Digital outperformed due to investments in service, including additional languages, as well as collect-in-store and fulfilment.
By product, outerwear and large leather goods contributed about half of mainline growth, and men's accessories and tailoring grew "strongly".
Asia Pacific reported double-digit percentage comparable sales growth, led by Greater China and a continued improvement in Korea. Americas and EMEIA saw high single-digit comparable sales growth. In the UK, France and Germany, Burberry said its performance was "robust", while Italy remained weak.
Outgoing CEO Angela Ahrendts said: "In the all-important festive period, we are pleased with our 12% comparable sales growth, which was in line with our expectations.
"This performance reflects continuing strong brand momentum and our team's intense focus on retail execution, supported by a planned increase in investment in marketing, customer service offline and online and our retail portfolio."
But she warned: "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."
Commenting on the results, Conlumino analyst Anusha Couttigane said: "Going forward, Burberry will pin its expectations to high single digit growth in its wholesale division, with net new openings delivering lower level retail growth.
"This was Angela Ahrendts's final Christmas with the company and the coming months will pave the way for Christopher Bailey to fully take the reins as he transitions from chief creative officer to chief executive."
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