Total revenues increased by 18%, 17% underlying*
Retail sales up 21% on an underlying basis, driven by new stores
High single digit wholesale sales growth anticipated for the Autumn/Winter 2003 season; wholesale revenue increased 5% in the quarter
Licensing revenue up 7% underlying
*Underlying figures are calculated at constant exchange rates and exclude the impact of the July 2002 acquisition of the operations of Burberry's distributor in Korea (the 'Korea acquisition').
Commenting on the trading results, Rose Marie Bravo, Chief Executive, stated, ''Following the very challenging start to the year due to external factors, Burberry achieved gradual improvement in trading as the quarter progressed. During the period, we continued to invest in our business through retail expansion, product development efforts and the upgrading of infrastructure in keeping with our long-range strategies. Burberry's results to date and the improving operating environment are consistent with management's expectations for the financial year.''
Total revenues
Total revenues in the first quarter increased by 18% (22% at constant exchange rates), or 17% on an underlying* basis (i.e. at constant exchange rates and excluding the impact of the Korea acquisition) compared to the same period last year.
Retail
Total retail sales increased by 33% (boosted by the Korea acquisition) andb accounted for approximately 53% of total revenue in the quarter. On an underlying basis, retail sales increased by 21%, driven primarily by contributions from stores opened in 2002/03. Comparable store sales, which declined modestly over the first seven weeks of the period, benefited from a strong summer promotional period and recorded a marginal gain for the quarter as a whole. During the quarter, the US remained the best performing market. Europe continued to be soft, while non-Japan Asia markets exhibited signs of recovery. While work progressed on Burberry's retail expansion, including the Milan store which is scheduled to open in September, no new stores were planned to open during the first quarter. Burberry remains on schedule to increase retail selling space by approximately 10% during the financial year.
Wholesale
As previously announced, Burberry anticipates high single digit wholesale sales growth for the Autumn/Winter 2003 season. In the first quarter, total wholesale sales increased by 5%. Underlying sales increased by 14%, partially as a result of the earlier shipments of autumn/winter product relative to the prior year. The majority of autumn/winter product shipments are concentrated in the second quarter of each financial year.
Licensing
Total licensing revenues in the quarter increased by 4%, 7% on an underlying basis. Royalties from the Japanese market reflected increases in certain royalty rates and single-digit volume gains. The volume gain is encouraging in light of the strong growth achieved in the comparable period last year and the lacklustre economic environment.
