Burberry sales fall but Rashford boosts full-price trading
Burberry sales fell in the third quarter as the impact of Covid-19 and fewer price cuts offset strong sales of full-price items boosted by its association with footballer Marcus Rashford.
Retail revenue fell 4% to £688m in the three months to the end of December as coronavirus-related store closures averaged 7%. Comparable store sales fell 9% as Burberry reduced markdowns but full-price sales rose at a "high single-digit" pace.
The FTSE 100 fashion brand said full-price sales were driven by new, younger customers and repeat purchases, helped by a successful festive campaign featuring Marcus Rashford, the Manchester United player who campaigns against child poverty in the UK.
The company said 15% of its branches were closed with 36% operating with reduced hours. Digital full-price sales rose by more than 50% with growth stronger in China. Burberry said fourth-quarter performance would show continued progress.
Sales in the Asia Pacific region rose 11% with strong growth in Mainland China and Korea but sales in Europe, the Middle East and other markets dropped 37% because of store closures and fewer tourists. Sales in the Americas dropped 8% as fewer markdowns more than offset a "mid-teen" rise in full-price purchases.
Burberry shares rose 5% to £18.25 at 08:28 GMT and were the biggest gainers in the FTSE 100 index.
The luxury clothing maker was attempting to overhaul its business when the Covid-19 pandemic struck, initially hammering sales in China, its biggest market, and other Asian countries. Chief Executive Marco Gobbetti is revamping collections to appeal to younger customers and reducing Burberry's reliance on price reductions.
The company said: "We expect trading will remain susceptible to regional disruptions as we close the financial year. In terms of full year trading, notwithstanding any incremental lockdowns, we expect gross margins to benefit from positive full-price, regional and channel mix and lower stock provisions. Cost savings are currently running in line with plan and we are on track to see inventory below last year's levels."