TIDMBRBY
RNS Number : 4079U
Burberry Group PLC
18 January 2017
18 January 2017
Burberry Group plc
Third Quarter Trading Update
Retail sales up 4% underlying, with strategies for long-term
growth delivering early results and efficiency plans on track
Highlights for the three months to 31 December 2016
-- Retail revenue GBP735m, up 4% underlying (up 22% at reported FX)
-- Comparable sales up 3%
- Asia Pacific returns to growth
o Acceleration in Mainland China and improvement in Hong
Kong
- Double-digit percentage growth in EMEIA
o Continued exceptional performance in the UK and improvement in
France
- Americas low single-digit percentage decline
o Similar trends in the US to the first half, with American
customer spend globally increasing
-- Operational and strategic progress, in line with plans announced in May
- Brand strength
o Engagement with festive campaign more than doubled to over 22
million film views
- Enhanced product strategies
o Growth led by newness across all categories with particular
strength in bags
- Customer cultivation and service
o Increased mainline conversion globally and double-digit uplift
in spend from returning customers
- Digital outperformed with growth in all regions
o Significant growth in mobile and China reflecting strategic
focus and investment
- Plans to enhance efficiency and effectiveness on track
o Cost savings of around GBP20m to be delivered in FY 2017 as
planned
-- GBP77m of GBP150m share buyback programme completed to date
Christopher Bailey, Chief Creative and Chief Executive Officer,
commented:
"With a record number of views of our festive film and strong
demand for new products in our collections, this third quarter
improvement reflects early progress from our plans to drive
Burberry's performance for the long term. We continue to take
action to position the business for growth over time and our plans
to enhance efficiency are on track."
The financial information contained herein is unaudited.
Retail revenue
Retail sales increased by 4% underlying (up 22% at reported FX),
with comparable sales up 3% and the balance from net new space.
Comparable sales by region,
-- Low single-digit percentage growth in Asia Pacific
- Acceleration in Mainland China, with high single-digit
percentage comparable sales growth, despite the impact of the
elevation of the store portfolio in Beijing
- Hong Kong improved to a low single-digit percentage comparable
sales decline, with positive conversion offsetting the majority of
the footfall decline
-- Double-digit percentage growth in EMEIA
- Continued exceptional performance in the UK with comparable
sales growth of around 40%. Growth from both travelling luxury
customers from all regions and from domestic customers
- Continental Europe remained weak, although France saw an improvement compared to Q2
-- Low single-digit percentage decline in the Americas
- In the United States, domestic and travelling luxury customer demand remained uneven
- Conversion improved and revenue from personal customer
appointments and events grew significantly
Digital outperformed with growth in all regions, reflecting
strategic focus and investment. Mobile led the growth, with
continued strong traffic and a meaningful improvement in
conversion, supported by the launch of new payment methods. The
re-designed global site is receiving positive Net Promoter Score
(NPS) results and the enhanced local website in China delivered
strong growth.
By product, fashion again outperformed replenishment and led
growth across all categories. Accessories outperformed, led by
strength in bags. Customers responded positively to our festive
assortment, with good growth in SLGs. The September collection
delivered strong results following the exceptional response to the
runway show.
Outlook
No change in the outlook for retail, wholesale and licensing
revenue to that given at the Interim Results in November 2016.
The expected benefit to FY 2017 reported adjusted
retail/wholesale profit based on 31 October exchange rates*
compared to FY 2016 rates was about GBP125m. This reduced to about
GBP115m using 31 December rates. Since then the movement in
exchange rates has become slightly more favourable.
We expect FY 2017 adjusted PBT to be in line with current market
expectations.
* See Appendix
Enquiries
Investors and analysts
Charlotte Cowley Director of Investor Relations 020 3367 3524
Media
Andrew Roberts VP, Corporate Relations 020 3367 3764
Nick Claydon Brunswick 020 7404 5959
Katharine Spence
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 corporate website
(www.burberryplc.com), with a replay available later. Burberry will
release its Second Half Trading Update for the six months to 31
March 2017 on 19 April 2017. It will announce its Preliminary
Results for the twelve months to 31 March 2017 on 18 May 2017.
Underlying performance is calculated before adjusting items and
removes the effect of changes in exchange rates, compared to the
prior period. This takes into account both the impact of the
movement in exchange rates on the translation of overseas
subsidiaries' results and also on foreign currency procurement and
sales through the Group's UK supply chain. Certain financial data
within this announcement have been rounded.
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.
Notes to editors
-- Burberry is a global luxury brand with a distinctive British
heritage, built around its core iconic outerwear.
-- Burberry designs and sources apparel, accessories and beauty,
selling through a diversified network of retail (including
digital), wholesale and licensing channels worldwide.
-- At 31 December 2016, Burberry globally had 213 retail stores,
202 concessions, 61 outlets and 48 franchise stores.
-- Burberry, which is headquartered in London, was founded in
1856. It 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 and the Burberry Check
are trademarks belonging to Burberry which are registered and
enforced worldwide.
Appendix
Exchange rates
Forecast full year average Average exchange rates
rates for FY 2017 FY 2016
GBP1= 31 December 31 October 31 March
2016 2016 2016
----------------------- --------------- ------------ -----------------------
Euro 1.19 1.16 1.36
US Dollar 1.30 1.29 1.50
Chinese Yuan Renminbi 8.75 8.54 9.57
Hong Kong Dollar 10.06 9.98 11.67
Korean Won 1,504 1,448 1,740
----------------------- --------------- ------------ -----------------------
Yen() 158 154 177
() For licensing revenue, taking into account the current hedged
positions
This information is provided by RNS
The company news service from the London Stock Exchange
END
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