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Burberry raises outlook as holiday sales boost revenue
BURBERRY Group Plc raised its full-year sales forecast after designer Riccardo Tisci's social-media-friendly new look helped boost revenue in the holiday period, offsetting the bruising impact of political protests in Hong Kong.
Full-year revenue should rise by a low single-digit percentage at constant exchange rates, compared with previous guidance for flat sales, Burberry said. Retail sales rose 3 per cent on an adjusted basis during the company's fiscal third quarter, which ran through December. The stock, which rose 27 per cent in 2019, fell 0.7 per cent on Wednesday morning.
A retooled aesthetic with new products, logos, and store decor is fuelling renewed interest in the British maker of US$2,000 trenchcoats and US$470 scarves.
New products made up three-quarters of the assortment. But with stores as far-flung as a boutique in Paris's posh 8th district and an outlet mall in Dawsonville, Georgia, the transition to a new Burberry is taking time.
"Brand heat is improving but we are unsure that it is strong enough to take market share from the sector winners," wrote Piral Dadhania, an analyst at RBC.
Revenue in Hong Kong dropped in half as the protests led to a drop in Chinese tourists. Sales on the mainland rose more than 10 per cent. Burberry's growth is still lagging peers nearly two years after the head designer, Tisci, was hired and about three years since chief executive officer Marco Gobbetti joined. Both came from top luxury rival LVMH. BLOOMBERG