Mulberry FY profit, revenue to beat expectations

Luxury handbag maker Mulberry said on Tuesday that full-year profit and revenue were set to be "moderately ahead" of expectations following continued solid trading in the second half.

In an update for the year to 2 April, Mulberry said the robust sales trend delivered in the first half of the year has continued throughout the second, while gross margins have been maintained.

"Mulberry has taken this opportunity to increase its marketing investment in the second half of FY22 to further build global brand awareness," it said. "Despite this additional expenditure, the profit for FY22 will be moderately ahead of current expectations."

The group said its balance sheet remains strong, with net cash balances at FY22 expected to be in excess of £20m.

Full-year results are due in June.

At 1025 BST, the shares were up 4% at 302p.

Victoria Scholar, head of investment at Interactive Investor, said: "In this notoriously fast-moving industry, marketing and ad spending are critical when it comes to attracting fickle fashionistas. Mulberry’s strategy to rebuild its brand awareness post pandemic should help drive gains for the bottom line with its strong sales trajectory in the first half paving the way for another successful six months.

"Mulberry has skilfully navigated supply chain uncertainties by stockpiling in Somerset and has also focused on attracting deep-pocketed customers in their domestic Asian markets who are now shopping at home while international travel remains subdued. High-end fashion brands such as Mulberry also have the benefit of being able to pass on inflationary cost increases to consumers in terms of higher prices without considerably dampening demand."