Burberry Expects Lower Forex Hit As First-Quarter Sales Grow

Marco Green
July 12, 2017

Luxury brand Burberry has today reported a better-than-expected increase in like-for-like sales in its first quarterly report under new CEO Marco Gobbetti.

Burberry has reported increased sales in the three months to June, helped by demand from China.

The company's direct-to-consumer revenue continued its growth with mobile transactions now representing 40 percent of the mix and China revenues more than doubling compared with prior year.

Shares in Burberry were trading up 4.4% at 1,648.00 pence early Wednesday following the news.

Mr Gobbetti, who takes over as chief executive from Christopher Bailey, said: "We are pleased with our performance in the first quarter".

"This is a time of great change for Burberry and the wider luxury industry", he added.

While the company saw mid single-digit percentage growth in Asia Pacific with Mainland China delivering mid-teens percentage growth and Hong Kong continuing to improve its performance, the company said, Korea remained challenging impacted by the macro environment.

Burberry is now undergoing a restructuring and is on track to deliver cost savings of £50mln by fiscal year 2018 and to begin operating a new business services centre in Leeds in October.

The first set of results under Gobbetti will have been watched closely by investors, following hints of a shareholder revolt over pay rewards for the outgoing chief executive Christopher Bailey.

Steve Clayton, fund manager at HL Select UK Growth Shares, noted that "The company says they are seeing "top customers returning" to their stores".

He also said that Burberry is likely to halt distribution to some of the third-party retailers who now stock its products.

Other reports by Click Lancashire

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