Burberry Reports 14% Sales Increase in Holiday Period

In Industry News, What's New by Jeff Prine

burberryLondon—Burberry Group PLC reported today that its third quarter sales increased 14% helped by robust sales, particularly in outerwear and large leathergoods, which accounted for about half the growth.

For the three months ended December 31, the British luxurygoods company posted the 14% increase to 528 million pounds (about $856 million) at both constant and reported exchange rates. Comparable store sales were up 12%.

Burberry’s chief executive Angela Ahrendts, said exchange rates could weigh on the fourth quarter figures.

Asia-Pacific Up ‘Double Digits’

“In the all-important festive period, we are pleased with our 12% comparable sales growth, which was in line with our expectations,” said Angela Ahrendts, chief executive. “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.”

Ahrendts, who will leave soon to takeover Apple’s retail operations, warned that exchanges rates and “macro-economic” uncertainty could create “significant headwind in the second half.”

As one of the first luxurygoods giants to report a slowdown in Asia-Pacific luxury sales in late 2012, Burberry appears to be an early beneficiary of that region’s rebound in luxury sales.

Burberry said Asia-Pacific reported double-digit growth in the three-month period, while the Americas and the EMEIA region (Europe, the Middle East, India and Africa) reported “mid to high single-digit growth. Performance was “robust” in the United Kingdom, France and Germany, while Italy remained weak.

During the third quarter, Burberry opened five mainline stores, including two in China, a fourth store in Mexico, and the first Burberry Beauty Box in London. In addition, one store and two concessions previously operated by a franchisee were acquired in Thailand, Burberry said.

The company said its outlook for the year, and its current financial position remain unchanged.