Burberry (LON: BRBY) have lifted their full year guidance following a strong period of festive trading.
The firm said that it beat its full year revenue guidance following higher sales across the Christmas trading period.
“This was another good quarter as new collections delivered strong growth and we continued to shift consumer perceptions of our brand and align the network to our new creative vision. While mindful of the uncertain macro-economic environment, we remain confident in our strategy and the outlook for FY 2020.” said Marco Gobbetti, Chief Executive Officer.
In the period to December 28, retail sales rose 1.1% year-on-year to £719 million from £711 million, or by 2% at constant currency.
On a like-for-like basis, sales climbed 3% during the period, building on a year before when they grew by 1%.
Notably, the firm said that the revenue increase was due to a rise in full price sales, which allowed ground to be made following political turmoil in Hong Kong.
In its Asia Pacific sector, sales rose by a low-single digit, Burberry said, with mainland China up in the “mid-teens” while Hong Kong sales halved.
For the financial year ending March, the company now expects revenue to grow by a low single-digit percentage, at constant currency. Previously, it saw flat sales at constant currency.
Regarding its outlook for financial 2020, the firm said:
“We now expect FY 2020 total revenue to grow by a low single digit percentage at CER compared to previous guidance of broadly stable. Adjusted operating margin is expected to remain broadly stable at CER despite the impact of disruptions in Hong Kong S.A.R.”
“FY 2020 is the second year of our plan to transform Burberry. Our focus in this phase is on investing to elevate our product offering, re-energise our brand and align distribution to our new luxury positioning. Against this backdrop, we made good progress in the quarter as we increased the availability of new products and continued to evolve our retail and wholesale networks.”
Good form continues for Burberry
In November, the firm saw its shares spike following an impressive interim update.
Burberry reported impressive revenue gains of 3% to £1.3 billion in the interim period, which caught shareholder appetite. Additionally, profit before tax climbed 11% from £174 million to £193 million.
Shareholders would have been further pleased as the clothing brand saw earnings per share increase to 36.4p an increase from 31.6p a year ago.
As a result Burberry increased its dividend by three per cent to 11.3p.
Burberry said new products designed by Ricardo Tisci has boosted sales, offsetting the effect of “considerable disruption” in Hong Kong where sales plunged.
However, sales in mainland China, Korea and Japan increased, along with the UK, Europe and the US.
Burberry shareholders will be impressed with today’s update, and will hope that the firm can build on the fine run that they currently are embarking on.
Shares in Burberry trade at 2,176p (-3.84%). 22/1/20 12:48BST.
