Year-end preliminary results for Burberry look promising

United Kingdom
Published:  13 May, 2021
Credit: Burberry

The luxury British fashion house has released its preliminary results for the year ended March 27, 2021, which showcases accelerated recovery and full-year sales growth of 32% in the final quarter of 2021.

Recovery accelerated through the year ending March 2021, leading to fourth quarter fiscal year comparable store sales increasing 32% year-on-year and going down 5% compared with the 2019 fiscal year, despite an average 16% of stores being closed. Within this, full-price sales grew 63% in the quarter, driven by Mainland China, Korea and the U.S.

For the full year, revenue decreased 10% at CER, impacted by store closures and reduced tourism, with strong recovery in the second half, up 8% at CER. Within this, 2021’s full-price comparable store sales grew 7%, accelerating through the year. This was driven by the response to product, with growth in strategic categories and in selling prices; increasing brand strength attracting new and younger customers; local customer traction, attributed to innovative selling formats during lockdowns and leveraged digital leadership, driving double digit comparable sales growth across all regions.

Adjusted operating profit was £396 million (US$554.9 million), down 8% CER, with reported operating profit at £521 million (US$730 million), up 176%. Full year dividend was reinstated at 2019 levels.

Outlook

Taking 2020 as the base year, Burberry expects revenue to grow at a high single digit percentage compound annual growth rate at fiscal year 2021 CER in the medium term. This will be underpinned by the continued outperformance of full-price sales. The brand will continue to strengthen brand equity by exiting markdowns in mainline stores in 2022.

In the 2022 fiscal year, adjusted operating margin progression will be impacted by operating expense normalisation and increased investment to accelerate growth, with more meaningful margin accretion thereafter.

Burberry is focused on and continues to invest in sustainability and its social goals of becoming carbon neutral by 2022.