Burberry beats Q1 forecasts in style

13th Jul 2010 07:02

Sales of coats and accessories were behind a better than expected leap in sales at luxury goods giant Burberry during the first quarter.Total sales jumped 27%, or 21% at constant exchange rates, to £291m in the three months to 30 June, although they grew 30% (24%) to £282m excluding the Spanish business which is being phased out.Retail sales grew 21% (16%) to £171m and the wholesale business improved 51% (46%) to £87m. Like for like sales were up 10%.Both UBS and Nomura predicted sales of £261m. The Japanese broker reckoned retail would contribute £173m and wholesale £71m. An anticipated 8% drop in licensing revenue to £17m was wide of the mark. Sales there rose 36% (14%) to £24m.Non-apparel, or accessories like scarves, hats, shoes bags and boots, was the strongest performing product division in the Burberry retail chain, with strength across the board, while outerwear "increased its penetration".Double-digit comparable store sales growth continued in Europe and Asia Pacific, especially in the UK, Italy, Germany, Hong Kong and Taiwan. Over at the wholesale division, "improved monthly flow of goods and supply chain efficiencies enabled a re-phasing of deliveries into the first quarter compared to last year". China, which is run under franchise, did well.In the six months to 30 September 2010, Burberry continues to project wholesale revenue at constant exchange rates to increase by a high teens percentage, excluding Spain."The clear momentum in the business and our robust financial position together reinforce our confidence to increase investment for the future, while continuing to enhance the brand," said chief executive Angela Ahrendts. "We plan to open between 20 and 30 stores in the current financial year, predominantly in the Americas and Asia Pacific."