TIDMBRBY
RNS Number : 9930F
Burberry Group PLC
14 July 2023
14 July 2023
BURBERRY GROUP PLC
FIRST QUARTER TRADING UPDATE
"We have made good progress in the quarter delivering high teens
comparable revenue growth led by the ongoing recovery in Mainland
China. We saw continued strength in our core outerwear and leather
goods categories and are excited about Daniel's product arriving in
stores in September. While mindful of the uncertain macroeconomic
environment, we are confident of achieving our FY24 and medium-term
guidance."
Jonathan Akeroyd, Chief Executive Officer
-- Q1 comparable store sales increased 18%
o Group ex Mainland China +11%; EMEIA +17%, South Asia Pacific
+39%, Japan +44%; South Korea +6% and Americas -8%
o Strong recovery in Mainland China +46%
-- Core categories of outerwear and leather goods performed well
o Outerwear comparable store sales up 36%, led by heritage
rainwear
o Leather goods comparable store sales up 13%
-- Compelling programme of brand and product activations driving
customer engagement, including launch of Summer capsule
-- Reopened flagship store on New Bond Street, London, offering
an immersive shopping experience across all categories; 19 stores
refurbished/opened in quarter
-- Announced expansion of Burberry Inspire community programme
to support 500,000 young people over next three years to unlock
creativity and drive positive change
-- Commenced a further share buy-back with the full GBP400m
expected to be completed by end of the calendar year
RETAIL REVENUE 13 WEEKSED 1 JULY
1 July 2 July % change
Reported
GBP million 2023 2022 FX CER*
------------------------------ ------ ------ -------- ----
Retail revenue 589 505 +17% +19%
Comparable store sales* +18% +1%
------------------------------ ------ ------ -------- ----
*See page 4 for definition
OUTLOOK
We maintain our current year guidance of high single-digit
revenue CAGR from FY20 base equating to a low double-digit growth
in FY24 and around 20% adjusted operating margin at FY20 CER. Based
on foreign exchange rates effective as of 29 June 2023, we expect a
currency headwind of c.GBP150m to revenue and c.GBP70m to adjusted
operating profit. We also maintain our medium-term target of GBP4bn
revenue*.
*Base year FY22 exchange rates
The financial information contained herein is unaudited
BUSINESS REVIEW
FY24 started well as comparable store sales advanced 18% in the
first quarter. The Group benefitted from strong underlying growth
in EMEIA, South Asia Pacific and Japan as well as the recovery in
Mainland China from COVID-19 related lockdowns last year.
During the quarter, we continued to invest in brand and product,
with our new visual expression of Burberry driving the strong
performance of outerwear, in particular heritage rainwear.
Comparable store sales of leather goods also delivered double-digit
growth, with women's bags, especially the Frances shapes and
vintage Burberry Check line performing well. We look forward to
building on this when Daniel Lee's debut runway collection launches
in stores in September.
We continued to inspire and engage our younger consumer base
with social media content iconising our brand codes. We achieved a
record 20.8m views on TikTok, with a post featuring our new blue
rose print.
In May, we introduced our new swimwear campaign 'A Burberry
Summer', inspired by Burberry's heritage of adventure. The
collection features a range of summer ready-to-wear, including
swimwear, as well as beach totes, all featuring the iconic Burberry
Check. This was supported by dedicated window displays in over 80
stores in key locations, as well as 15 seasonal pop ups in Turkey,
Italy and Thailand.
In the same month, we attended the Met Gala, where we were
joined by British and international talent including Jodie Comer
and Stormzy wearing custom Burberry looks. We collaborated with
director and choreographer Wayne McGregor to create the costumes
for his latest work for The Royal Ballet, designed by Daniel. The
new ballet production debuted with its world premiere in June and
was performed at the Royal Opera House in London. Burberry also
sponsored The National Gallery's Summer Party for the second
consecutive year.
During the quarter, we continued to elevate the customer
experience, refurbishing a further 19 stores in the period,
including our New Bond Street store in London, which reopened in
June. An evolution of our store concept, the flagship is home to an
immersive shopping experience, offering womenswear, menswear ,
eyewear, shoes, and accessories with a stronger focus on leather
goods, and a new VIP area. We also opened a store in 5(th) Avenue,
New York that temporarily replaces the 57(th) Street store whilst
under refurbishment. We remain on track to refurbish over 50% of
the store network by end of FY24 and to complete the roll out
across the rest of the portfolio by FY26.
At the same time, we maintained our support for our communities.
In June, we awarded the annual Thomas Burberry Prize to artist
Christine Wilkinson, building on our longstanding partnership with
the Royal Academy of Arts. The award reflects Burberry's continued
commitment to supporting the next generation of British creatives
in contemporary arts and culture. To build on this, we announced
the launch of an RA Schools Scholarship Grant and Bursary.
We also announced the expansion of our flagship community
programme, Burberry Inspire. Designed in partnership between
Burberry Group plc, The Burberry Foundation and International Youth
Foundation (IYF), the initiative will support 500,000 young people
over the next three years to unlock their creativity and drive
positive change. We also announced a two-year partnership with The
BRIT School to support fashion education and help young people from
global majority backgrounds to enter the creative industry.
REGIONAL COMPARABLE SALES PERFORMANCE
Q1 FY24 comparable store sales were up 18% in the period. All
regions outside of the Americas saw growth with Mainland China
recovering from COVID-19 related lockdowns in the previous year.
EMEIA, Japan and South Asia Pacific showed good double-digit growth
more than offsetting declines in the Americas.
-- Asia Pacific increased 36% with Mainland China up 46%.
Globally, we saw good strength from the Mainland Chinese customer
that grew mid-teens against FY22 and helped drive a strong
performance in South Asia Pacific 39% and contributed to the 44%
increase in Japan. South Korea remained robust with growth of 6%
broadly in line with last year.
-- EMEIA grew 17% driven by tourists.
-- Americas decreased 8%, broadly in line with Q4 FY23.
Globally, the Americas customer decreased mid-single digit with the
decline in locals partially offset by outbound tourist spend.
Space contributed +1% in the quarter while FX was a headwind of
2%. In total, reported retail sales grew 17% year on year at
reported rates.
All metrics and commentary in this presentation are at reported
FX and exclude adjusting items unless stated otherwise.
Constant exchange rates (CER) removes the effect of changes in
exchange rates. The constant exchange rate incorporates both the
impact of the movement in exchange rates on the translation of
overseas subsidiaries' results and on foreign currency procurement
and sales through the Group's UK supply chain.
Comparable sales are the year-on-year change in sales from
stores trading over equivalent time periods and measured at
constant foreign exchange rates. It also includes online sales.
This measure is used to strip out the impact of permanent store
openings and closings, or those closures relating to
refurbishments, allowing a comparison of equivalent store
performance against the prior period. The measurement of comparable
sales has not excluded stores temporarily closed as a result of the
COVID-19 outbreak.
Certain financial data within this announcement have been
rounded. Growth rates and ratios are calculated on unrounded
numbers.
ENQUIRIES
Investors and analysts 020 3367 3524
Julian Easthope VP, Investor Relations julian.easthope@burberry.com
Media 020 3367 3764
Andrew Roberts SVP, Corporate Relations andrew.roberts@burberry.com
and Engagement
----------------- -------------------------- -----------------------------
-- There will be a conference call for investors and analysts to
discuss this update today at 9am (UK time)
-- The conference call can be accessed live on the Burberry
website www.burberryplc.com and can also be accessed live via a
listen only dial-in facility, click here to register.
-- The supporting slides and an indexed replay will be available
on the website later in the day
-- Burberry will issue its Interim results for the 26 weeks
ending 30 September 2023 on 16 November 2023
Certain statements made in this announcement are forward-looking
statements. Such statements are based on current expectations and
are subject to a number of risks and uncertainties that could cause
actual results to differ materially from any expected future
results in forward-looking statements. Burberry Group plc
undertakes no obligation to update these forward-looking statements
and will not publicly release any revisions it may make to these
forward-looking statements that may result from events or
circumstances arising after the date of this document. Nothing in
this announcement should be construed as a profit forecast. All
persons, wherever located, should consult any additional
disclosures that Burberry Group plc may make in any regulatory
announcements or documents which it publishes. All persons,
wherever located, should take note of these disclosures. This
announcement does not constitute an invitation to underwrite,
subscribe for or otherwise acquire or dispose of any Burberry Group
plc shares, in the UK, or in the US, or under the US Securities Act
1933 or in any other jurisdiction.
Burberry is listed on the London Stock Exchange (BRBY.L) and is
a constituent of the FTSE 100 index. ADR symbol OTC:BURBY.
BURBERRY, the Equestrian Knight Device, the Burberry Check, and the
Thomas Burberry Monogram and Print are trademarks belonging to
Burberry.
www.burberryplc.com
LinkedIn: Burberry
Notes to editors
-- Burberry is a British luxury brand, headquartered in London
-- At 1 July 2023, globally Burberry had 218 retail stores, 136
concessions, 57 outlets and 33 franchise stores, excluding pop-up
stores.
APPENDIX
Based on effective FX rates as of 29 June 2023, in FY24 there is
a c.GBP150m headwind from exchange rate movements on revenue and a
c.GBP70m headwind on adjusted operating profit. This compares to
guidance given in May for a c.GBP70m headwind on revenue and a
c.GBP40m headwind on adjusted operating profit.
Exchange rates Forecast average effective Actual average exchange
rates rates
GBP1= 29 June 2023 21 April FY23
2023
---------------- ---------- -----------------------
Euro 1.16 1.13 1.16
US Dollar 1.26 1.24 1.20
Chinese Yuan 9.07 8.57 8.27
Hong Kong Dollar 9.87 9.75 9.43
Korean Won 1,659 1,653 1,577
---------------- ---------- -----------------------
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