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Burberry recoups sales growth in October despite closed stores
[LONDON] Burberry's sales returned to growth in October, indicating the British luxury brand was recovering from the impact of the Covid-19 pandemic, with comparable store sales falling by less than expected in the previous quarter.
Analysts had expected comparable sales to fall by 12 per cent in the second quarter, but Burberry said on Thursday the drop was only 6 per cent and that it had seen strong double-digit growth in mainland China, Korea and the United States in the period.
"While the virus continues to impact sales in EMEIA (Europe, Middle East, India and Africa), Japan and South Asia Pacific, we are encouraged by our overall recovery and the strong response to our brand and product, particularly among new and younger customers," Burberry chief executive Marco Gobbetti said.
Burberry reported revenue of £878 million (S$1.57 billion) for the six months to Sept 26, down 31 per cent on a year earlier but better than analysts had predicted, while adjusted operating profit fell 75 per cent to £51 million.
Although more than 10 per cent of its stores were closed globally following new lockdowns in Europe, including in London and Paris, it said it was attracting new and younger consumers.
Burberry said that as a result it had decided to reduce markdowns, which would be a revenue headwind in the second half of its financial year.