Published January 15, 2013
LONDON – British luxury brand Burberry beat forecasts with a 9 percent rise in third quarter underlying revenue after a particularly strong week in the run up to Christmas.
The 157-year-old seller of raincoats and leather goods, known for its camel, red and black check pattern, said on Tuesday it made 613 million pounds ($985 million) of revenues in the three months to December 31.
That compared with analysts' average forecast of 602 million pounds, according to a company poll, and 574 million pounds in the same period last year. However the group trimmed its wholesale revenue guidance for the second half after growth in the United States, Asia travel retail and emerging markets was more than offset by weaker European markets.
Last September Burberry sent shock waves through the luxury industry by warning of a broad-based slowdown in spending - particularly in China, which had been the driving force of a boom in demand for luxury goods. But it has calmed investors with subsequent statements.
Third quarter retail revenue was up an underlying 13 percent to 464 million pounds, with scarves, mens tailoring and accessories outperforming and the firm selling a higher proportion of goods from its top-end Prorsum and London lines.
Comparable store sales growth was 6 percent versus analysts' consensus forecast of a rise of 2 percent and a second quarter increase of 1 percent.
Wholesale revenue at 120 million pounds was down an underlying 5 percent and Burberry is now forecasting underlying wholesale revenue to fall by "a low to mid single-digit percentage" year-on-year in the second half, reflecting lower sales to small specialty accounts in Europe.
Its previous guidance was for a broadly unchanged performance.
Third quarter licensing revenue was 29 million pounds, up 4 percent underlying.
"We expect the external global environment to remain challenging," said Chief Executive Angela Ahrendts.
Shares in Burberry, up 18 percent in the last three months, closed Monday at 1,325 pence, valuing the business at 5.86 billion pounds. ($1 = 0.6224 British pounds)
(Reporting by James Davey; editing by Kate Holton)