In the face of a global luxury slowdown, Burberry showcased impressive resilience in its recently revealed first-half results. CEO Jonathan Akeroyd highlighted the company’s substantial progress in achieving strategic goals, even as challenges persisted.
Key Highlights:
- Revenue Growth: Burberry reported a 4% revenue increase to £1.396 billion for the 26 weeks ending in September, with a 7% rise at constant exchange rates.
- Regional Performance: While the Americas experienced a 10% sales drop, Asia Pacific and EMEIA regions demonstrated strength with 2% and 10% growth, respectively.
- Asia Pacific Dynamics: Robust growth in Asia Pacific, with a strong Q1 recovery of 36%, offset a Q2 slowdown influenced by a tougher comparative and China-related issues.
- EMEIA Strength: The EMEIA region saw a strong growth of 14% in comparable store sales for H1 and 10% in Q2, outperforming the overall regional average.
- Product Categories: Core, outerwear, and leather goods performed well, with outerwear comp store sales increasing by 21% in H1 and leather goods, especially bags, demonstrating growth.
- Beauty Business Success: Burberry’s beauty business flourished, driven by the successful launch of the Burberry Goddess fragrance.
- Challenges in Profit: Adjusted operating profit faced challenges, declining 6% to £223 million, with the adjusted operating profit margin dropping to 15.9% from 17.7%.
- Profit Drivers: Challenges were attributed to the Q2 performance in the Americas, last year’s H1 benefit from certain unrepeated adjusting items, and increased adjusted net operating expenses.
- Foreign Exchange Impact: Adjusted operating profit faced a foreign exchange impact, contributing to a £17 million dent.
- Optimistic Outlook: Despite uncertainties, Burberry remains optimistic, emphasizing a coherent brand aesthetic, high-impact activations, and the successful Winter 23 collection launch.
These results underscore Burberry’s commitment to strategic growth, brand resilience, and creative vision amid the evolving dynamics of the luxury market.
