Burberry maintains 2018 guidance despite declining revenue

Worldwide
Published:  18 January, 2018

The British luxury fashion Group’s retail sales for the third quarter ended December 31, 2017 declined -2% on a reported basis (+1% underlying).

Burberry’s unaudited financial report shows that, in terms of comparable store sales, the Asia Pacific region recorded mid-single digit percentage growth consistent with the first-half, while the poor UK performance in the quarter is said to have impacted the EMEIA (Europe, Middle East and Africa) results, which posted a low single-digit percentage decline. Sales in the UK declined by “a high single-digit percentage, as it annualised exceptional performance of 40% growth in the prior year boosted by tourist inflows”, and sales in continental Europe “grew”, while that of the Middle East “improved”.

In the Americas, low single-digit percentage growth was recorded in the period, “consistent with the second-quarter”, with sales in the U.S. remaining broadly unchanged year-on-year as an improved conversion offset footfall declines, according to Burberry.

Retail revenue for the three months stood at £719 million (US$996.18 million), down from £735 million (US$1.018million) in the same period the previous year. The fashion division is reported to have “outperformed as customers continued to respond positively to new products across categories”, and the British fashion Group says it is preparing for new bag launches starting from Spring 2018.

“We are making good progress embedding our strategic vision into the organisation and remain on track to meet our full year profit target. We are building on strong foundations and are fully focussed on the successful delivery of our multi-year plan to position Burberry firmly in luxury and deliver long-term sustainable value”, said Marco Gobbetti, CEO, Burberry.

The Group confirmed it maintains its guidance for full 2018. It expects margin improvement at constant exchange rates and to remain strongly cash generative. Upon release of the results on January 17, shares of Burberry are said to have plummeted, to finish the session 8% lower. 

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