LONDON — Full-price sales helped drive robust growth in the first half at Burberry, with revenue up 38 percent to 1.2 billion pounds in the six months to Sept. 25.
Operating profit more than doubled to 207 million pounds, while profit after tax tripled to 145 million pounds compared to the corresponding period in 2020, when luxury companies were mired in the COVID-19 pandemic.
The figures were not enough to convince investors, with the share price falling 9 percent to 17.92 pounds in early-morning trading on the London Stock Exchange Thursday.
Gerry Murphy, Burberry’s chair, said full-price sales have been growing in the double-digits, driving margin expansion and free cash generation. The company, he added, is maintaining its medium-term guidance for high-single-digit top-line growth, and has maintained its sales and profit guidance for the 2021-22 fiscal year, which ends in March.
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“We are seeing an acceleration in performance in countries less impacted by travel restrictions, and we remain confident of achieving our medium-term goals,” said Murphy, who also bid farewell to Marco Gobbetti, Burberry’s chief executive officer who’ll be taking up the same role at Salvatore Ferragamo next year.
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“I would like to thank Marco Gobbetti for his vision and leadership of Burberry’s transformation. We are very excited that Jonathan Akeroyd is joining as our new CEO in April to build on the strong foundations to accelerate growth and deliver further value for our shareholders,” he said.
The company also noted that retail store sales were up 37 percent compared with 2020, and 1 percent compared with 2019. Full-price retail store sales were up 18 percent compared with 2019, reflecting the company’s moves over the past 12 months to halt discounting, shrink seasonal sales and markdown periods.
Burberry added that the Americas, mainland China and South Korea delivered strong double-digit growth compared with 2019, while other regions remained under pressure from reduced tourist levels.
Leather goods saw double-digit growth in full-price comparable sales compared with 2019, with outerwear sales strengthened in the period. The company said its new store format is also attracting a higher-spending customer.
Burberry said it has 15 stores in the new format, which debuted over the summer in Knightsbridge, London, with around 50 new concept stores planned globally by the end of the current fiscal year.
The company said that digital has also been performing well, with full-price sales almost doubling compared with 2019. The interim dividend has been reinstated at 11.6 pence, 3 percent ahead of fiscal 2019-20 levels.