Shoppers Flock to Burberry as Sales Figures Beat Expectations
Shares of Burberry rose 12.9% on Friday, following the company’s report of a shallower-than-expected decline in sales during the fiscal third quarter. The British fashion house reported a 4% decline in comparable sales, beating analysts’ estimates of a 12% decrease.
The good news came despite a 7% year-over-year drop in total revenue to £659 million ($816 million) during the festive shopping period. The decline was attributed to subdued sales in Asia Pacific and Europe, Middle East, India and Africa, but was offset by a 4% increase in the Americas.
CEO Joshua Schulman, who joined the company in July, expressed optimism about the results, stating that he was “encouraged” by the response from customers to Burberry’s latest campaigns. However, he noted that the brand’s transformation was still in its early stages and that “there remains much to do”.
Schulman also warned that the company’s strategic plan would take time to deliver sustainable, profitable growth, but was encouraged by the acceleration of its core categories, including outerwear, accessories, and leather goods. He added that the brand’s latest campaigns had resonated well with customers, but the company’s transformation was still in its early stages.
Burberry’s results come amid a broader uptick in luxury sales over the holiday period, with rival Richemont reporting its “highest ever” quarterly sales figure. Analysts have hailed the results as a positive initial signal for the brand, citing efforts to streamline stores and collections, and the company’s refocus on core product categories.
However, the company’s Chief Financial Officer, Kate Ferry, cautioned that it was too early to set a timeframe for the overhaul, but the company hoped to return to the success of its recent past in the near-term.
