China significantly disrupts Q3 results for Burberry

Worldwide
Published:  18 January, 2023
Credit: Burberry

Burberry has reported its result for the third quarter of the 2023 financial year, achieving a 5% increase in retail revenue.

Retail revenue for the company totalled £756 million (US$935.42 million), an increase of 5% over the same period in 2021.

Meanwhile, comparable store sales saw an increase of 1% in Q3, compared to an increase of 7% in the same quarter of 2021. Burberry noted this result was despite significant disruption in Mainland China.

Excluding Mainland China, comparable store sales saw an increase of 11% with EMEIA, Japan, South Korea and South Asia Pacific all showing double-digit growth.

Looking at the major regions, EMEIA achieved growth of 19%, led by sales to tourists, while the Americas fell by 1% and Asia Pacific fell by 7% due to a drop of 23% in Mainland China offset by increases of 10% in South Korea, 28% in Japan and 15% in South Asia Pacific.

Burberry’s outlook continues its focus on high single-digit revenue growth with operating leverage ensuring good margin progression, notwithstanding the current macro environment. The company expects, based on the effective foreign exchange rates as of December 30, 2022, a currency tailwind of around £160 million (US$197.98 million) on revenue and around £70 million (US$86.61 million) on adjusted operating profit in FY23.

Jonathan Akeroyd, Chief Executive Officer of Burberry, said: “Overall, we are pleased with our performance in the third quarter as double-digit revenue growth outside of Mainland China offset the impact of Covid-19-related disruption there. Europe in particular continued to perform well, driven by strong trading over the festive period, and leather goods delivered another quarter of double-digit growth globally.

“We remain confident in our ability to reach our medium-term targets, despite the current macro-economic environment. We are focused on executing our plan to realise Burberry’s potential as the modern British luxury brand and we look forward to unveiling Daniel Lee’s debut collection for Burberry on our return to London Fashion Week next month.”