Annual turnover at Burberry has surpassed £3billion after loosening Covid-related restrictions produced a resurgence in foreign tourist spending.
The luxury retailer revealed revenue increased by 10 per cent to £3.1billion for the 52 weeks ending 1 April, driven by solid performances in Continental Europe and the Asia-Pacific region during the latter part of the period.
Store sales across Europe, the Middle East, India and Africa grew the most of any territory, jumping by 27 per cent, with the share of traveller purchases rising to over 40 per cent from less than a quarter the previous year.
Burberry revealed revenue increased by 10 per cent to £3.1billion last year as loosening Covid-related restrictions produced a resurgence in foreign tourist spending
By contrast, trading in Mainland China – one of the company’s biggest markets – was dampened by continued draconian lockdown rules for most of 2022, slowing the firm’s total sales growth before recovering in the new year.
For the fourth quarter, Burberry’s shop purchases rose by 16 per cent, with revenues soaring by more than half in the South Asia Pacific market as Chinese tourists started returning.
At the same time, purchases of rainwear clothing in its stores doubled, which the group attributed to the recent heritage-focused rebranding spearheaded by Daniel Lee, its new chief creative officer.
Customers also snapped up more men’s leather goods, as well as Lola handbags in the aftermath of an advertising campaign featuring models such as Bella Hadid, Ella Richards and Jourdan Dunn.
The strong trading performance helped Burberry’s reported operating profit climb by 21 per cent to £657million and enabled it to recommended a 30 per cent hike in its annual dividend.
‘I am very pleased with what we have achieved this year,’ said Burberry’s chief executive Jonathan Akeroyd.
He added: ‘While the external environment remains uncertain, I am confident we can achieve our FY24 and medium-term targets as we focus on executing our plan to realise Burberry’s potential as the modern British luxury brand.’
However, investors responded negatively to the brand revealing its full-year sales fell across the Americas, unlike many of its prominent European rivals, and the group upholding its outlook for the 2024 financial year.
Based on currency spot rates of 21 April, the London-listed firm forecasts currency movements will cost approximately £70million in turnover and £40million in underlying profits this year.
Burberry shares were 6 per cent lower at £23.68 late Thursday morning, making them the second-worst performer on the FTSE 100 Index, although they have still jumped by about 59 per cent over the past 12 months.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: ‘The maintaining of existing guidance is a little lacklustre, and investors are also not blind to the fact that significant macroeconomic uncertainty persists.
‘As a higher-end name, Burberry is more insulated from ups and downs than some, but it’s not quite in the very top echelons of luxury fashion, so there’s slightly less room for manoeuvre.’
This post first appeared on Dailymail.co.uk
