Burberry sales slow marginally in third quarter

15th Jan 2014 07:21

- Sales up 12 per cent- Retail revenue up 14 per cent- Outlook and expectations remain the sameRevenue growth slowed marginally in the third quarter for fashion retailer Burberry, in line with expectations, as in-store traffic remained weak but grew online.On the back of continued growth of menswear and strong performance from coats, jackets and large leather goods, the FTSE 100 group generated retail sales of £528m, up 14% on the same period of the year before at both constant and reported exchange rates, which was down from the 17% growth enjoyed in the first half.Tipped by UBS as a likely takeover target this year, Burberry opened five stores, including two in China and a first 'Beauty Box' outlet in London's Covent Garden. Like-for-like sales grew 12%, slowing from the 13% comparable growth in the previous six months. That was ahead of analysts' forecasts by a wide margin.While Asia Pacific again delivered double-digit percentage comparable sales growth, led by Greater China and a continued improvement in Korea, growth in Europe, Middle East, India and Africa slowed from "double-digit" to "mid to high single-digit", with Americas growth remaining in the mid to high single-digit range. Performance was reportedly robust in the UK, France and Germany, while Italy remained weak. Chief Executive Angela Ahrendts, whose resignation announcement in October wiped over £500m off the company's value, said: "In the all-important festive period, we are pleased with our 12% comparable sales growth, which was in line with our expectations."She said the performance reflected continuing strong brand momentum and the company's famously intense focus on retail execution, supported by planned increases in investment in its marketing, customer service and retail estate.As in the first half of the year, the key drivers of retail growth were that traffic into stores remained weak but were counterbalanced by online growth, reflecting evolving consumer behaviour. Nevertheless, conversion increased both offline and online.Burberry's digital operations outperformed thanks to investment in areas such as customer service, with new languages added to the online store and click-and-collect fulfilment. Other first-half trends continued, as outerwear and large leather goods together contributed about half of mainline growth, and men's accessories and tailoring again continued strong growth.OH