Burberry hails strategic progress despite sales decline
Lower sales were somewhat offset by a full-price sales growth driven by new and younger clientele
Burberry has welcomed a period of “strong” strategic progress in its third quarter, despite sales sliding by 9% in the 13 weeks ended 26 December.
The fashion house said that lower sales were attributed to planned reductions in markdown and reduced tourist traffic in outlets. In addition, Covid-19 related store closures averaged 7% in the period, further impacting trading.
Nonetheless, this was offset by a full-price sales growth driven by new and younger clientele. The group also welcomed good strategic progress in the full price sales in leather and outerwear.
In addition, it welcomed a digital full-price sales growth over 50%, with Mainland China seeing triple-digit growth.
Burberry also launched a “highly successful” campaign in the period, featuring footballer Marcus Rashford MBE. The consumer response was “exceptional”, according to the group, with engagement on its Instagram campaign posts more than double the Q2 average.
Looking ahead, the group remains “encouraged” by the outperformance of its full-price sales in the period, and expects continued progress on strategic objectives in Q4.
It also expects gross margins to benefit from positive full-price, regional and channel mix and lower stock provisions, while cost savings and inventory plans remain “on track”.
Whilst it predicts that Q4 headwinds will persist from store closures, its third quarter performance, driven by product and digital capabilities, “reinforces confidence” in its prospects.
Marco Gobbetti, CEO, said: “Despite the challenging external environment, we made good progress on our strategic priorities in the quarter. We saw a strong increase in full-price sales as our collections and communication resonated well with new, younger clientele as well as existing customers.
“Our localised plans and digital capabilities helped drive growth in rebounding markets and we implemented our planned reduction in markdown. While the short-term outlook remains uncertain due to Covid-19, we are well placed to accelerate when the pandemic eases.”
