13 January 2004. Burberry Group plc reports on trading for the third quarter ended December 2003.
– Total revenues increased by 15% on an underlying* basis, 12% reported
– Retail sales up 11% underlying (7% reported), driven by new stores
-High single digit wholesale sales growth now anticipated for spring/summer 2004 season; wholesale sales increased 23% underlying (23% reported)
– Licensing revenue up 18% underlying, 10% reported
*Underlying figures are calculated at constant exchange rates.
Commenting on the trading results, Rose Marie Bravo, Chief Executive, stated, #'We are pleased with Burberry's performance in the quarter. Against exceptional prior year results, we achieved 15% underlying revenue growth. With a strong initial consumer response to our spring/summer product at retail and a healthy wholesale order book for the season, Burberry enters the remaining quarter of the year with continued momentum.''
Total revenues in the quarter ended December 2003 increased by 12%, 15% on an underlying* basis (i.e. at constant exchange rates), compared to the same period last year.
Retail sales increased by 11% underlying, 7% reported, and accounted for approximately 60% of total revenue in the quarter. This growth was driven by new stores with a marginal contribution from existing stores, which was achieved in the context of an exceptionally strong prior year performance.
Regional market performance was generally consistent with early autumn trends. The US market continued its impressive strength. In Asia, Hong Kong has fully recovered from the shocks earlier in the year and the Korean business has demonstrated resilience in a volatile environment. In Europe, UK performance reflected a sluggish market, while the continental European market continued to gain momentum.
The Group opened four Burberry stores in the period, including its first stores in Australia (Melbourne) and Malaysia (Kuala Lumpur), and an additional store in each of the Hong Kong and Singapore markets. One outlet store was also opened during the period. In total, the Group remains on schedule to expand selling space by approximately 12% by the end of the current financial year.
Wholesale sales increased by 23% underlying, 23% reported, during the quarter. This gain reflects continuing growth of the business magnified by the trend toward earlier deliveries for spring/summer product and excellent shipping performance. On the basis of orders received to date, Burberry now anticipates high single-digit wholesale sales growth for the Spring/Summer 2004 season. The majority of spring/summer merchandise is shipped in the fourth quarter of each financial year.
Total licensing revenues in the quarter increased by 18% on an underlying basis, and 10% reported. Licensing revenues from the Japanese market reflected increases in certain royalty rates and a reduction in management fees with respect to specific licences. The broadly static volumes in Japan are in the context of exceptional gains achieved in the comparable periods of the two preceding years. Licensing revenues also benefited from strong sales gains by global product licensees, particularly fragrances where Burberry Brit continued to benefit from its outstanding launch.