Burberry sales exceed £3bn as tourist volumes rebound
Burberry turnover exceeds £3bn as tourist volumes recover following easing of coronavirus travel restrictions
- Burberry revealed sales for the year ended April 1 are up 10% to £3.1 billion
- Trade in mainland China has been dampened by ongoing draconian lockdowns
- Lola handbags and rainwear were especially popular with Burberry’s customers
Annual turnover at Burberry is more than £3bn after the easing of Covid-related restrictions sparked a resurgence in overseas tourism spending.
The luxury retailer revealed that sales rose 10 percent to £3.1 billion in the 52 weeks ended April 1, driven by solid performance in continental Europe and the Asia-Pacific region during the latter part of the period.
Retail sales in Europe, the Middle East, India and Africa grew the most of any territory, rising 27 percent, with the share of traveler purchases rising to more than 40 percent from less than a quarter last year.
Burberry revealed sales jumped 10 per cent to £3.1bn last year as easing of Covid-related restrictions sparked a resurgence in foreign tourism spending
In contrast, trade in mainland China – one of the company’s largest markets – was dampened by ongoing draconian lockdown rules for most of 2022, slowing the company’s overall revenue growth before rebounding in the new year.
In the fourth quarter, purchases from Burberry’s stores were up 16 percent, with revenues in the South Asia-Pacific market rising by more than half as Chinese tourists began to return.
At the same time, purchases of rainwear in its stores doubled, which the group attributed to its recent heritage-focused rebranding spearheaded by Daniel Lee, its new chief creative officer.
Customers also bought more men’s leather goods, as well as Lola handbags, in the wake of an advertising campaign featuring models such as Bella Hadid, Ella Richards and Jourdan Dunn.
The strong trading performance helped Burberry’s reported operating profit rise 21 percent to £657 million and enabled it to recommend a 30 percent increase in its annual dividend.
“I am very pleased with what we have achieved this year,” said Jonathan Akeroyd, Burberry CEO.
He added: “While the external environment remains uncertain, I am confident that we can meet our FY24 and mid-term targets as we focus on executing our plan to unlock the potential of Burberry as the modern British luxury brand.’
However, investors reacted negatively to the brand revealing full-year sales in the Americas were down, unlike many of its prominent European rivals, and that the group maintained its fiscal 2024 outlook.
Based on April 21 spot exchange rates, the London-listed company forecasts that currency movements will cost around £70m in revenue and £40m in underlying profit this year.
Burberry shares were down 6 per cent at £23.68 late Thursday morning, making them the second worst performer on the FTSE 100 index, though they are still up around 59 per cent over the past 12 months.
Sophie Lund-Yates, principal equity analyst at Hargreaves Lansdown, said: ‘Enforcing the existing guidance is a bit lackluster, and investors are also not blind to the fact that significant macroeconomic uncertainty persists.
“As a more expensive name, Burberry is more insulated from ups and downs than some, but it’s not quite at the pinnacle of luxury fashion, so there’s a little less wiggle room.”