Sales growth slows at Burberry but expansion continues
Luxury clothing brand Burberry has reported a rise in its first quarter revenue although sales growth slowed during the period as a result of challenging trading conditions.
In the three months to end June total revenue increased by 11% to £408 million from £367 million in the same period last year. However, analysts had expected sales of £416 million.
Retail revenue was up 14% to £280 million from £245 million in the previous year. Like-for-like sales rose 6% year-on-year helped by strong sales of menswear.
Burberry opened six mainline stores in the period including stores in Brazil and Hong Kong. It also plans to open new stores in London, Milan, Chicago, Hong Kong and Shanghai later this year and to increase average retail selling space by 12-14% in the year to 31 March 2013. This will include a shift from smaller to larger format stores.
Wholesale revenues were up 9% to £102 million as the company benefited from earlier deliveries. However licensing revenue was down 5% to £26 million.
Commenting on the trading Angela Ahrendts, chief executive officer, said: "With continued brand momentum, Burberry has delivered a robust first quarter. Revenue was up 11% against a more challenging external environment. Sales in retail, now about 70% of the business, increased by 14%, with initiatives to elevate brand equity balanced by improved store productivity and new space."
Ahrendts added: "Building on our balanced business model and strong operational foundation, we continue to invest in our retail, digital and marketing strategies to drive long-term sustainable growth, while remaining responsive to the changing external environment."
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