Financial News
FIRST QUARTER TRADING UPDATE
19 JULY 2004
Burberry Group plc reports on trading for the first quarter ended 30 June 2004.
Highlights
- Total revenues increased 14% on an underlying basis, 6% reported
- Retail sales rose 15% underlying (7% reported) driven by new stores
- Wholesale revenues increased 10% underlying (5% reported) with growth of approximately 10% expected for the Autumn/Winter 2004 season
- Licensing revenue increased by 17% underlying (9% reported)
| Quarter to 30 June | |||||||||
| 2004 | 2003 | % change | |||||||
| £ million | Reported | Underlying* | Reported | Reported | Underlying* | ||||
| Retail | 55.6 | 59.9 | 52.1 | 7 | 15 | ||||
| Wholesale | 37.0 | 38.8 | 35.1 | 5 | 10 | ||||
| Licence | 11.1 | 11.9 | 10.2 | 9 | 17 | ||||
| Total | 103.7 | 110.6 | 97.4 | 6 | 14 | ||||
* Underlying figures are calculated at the same exchange rates as used in the previous year's quarterly reported results.
Commenting on the trading results, Rose Marie Bravo, Chief Executive, stated, "The financial year is off to a good start. In this quarter which marks Burberry's seasonal transition from spring to autumn, we achieved strong sell-through of remaining spring/summer merchandise and experienced an encouraging initial consumer response to our autumn/winter collections. This performance is consistent with expectations for the full financial year."
Total revenues
Total revenues in the first quarter increased by 14% on an underlying basis (i.e. at constant exchange rates), 6% reported, compared to the same period last year.
Retail
Retail sales in the quarter increased by 15% underlying, 7% reported, driven by contributions from newly opened stores with modest gains at existing stores. Retail sales accounted for approximately 54% of total revenue in the quarter. Burberry remains on schedule to open seven new stores and concessions, adding approximately 8% net retail selling area, for the financial year; no new store openings were planned for the first quarter.
Retail sales growth varied by region. As anticipated, against a strong comparative driven by end of season sale activity in the 2003/04 period, US market sales growth moderated in the current period. This was accompanied by a corresponding benefit to gross margin. Continental European markets continued to achieve vigorous growth while the UK market continued to demonstrate improvement in the quarter relative to the previous period. In Asia, sales in Korea continued to be adversely affected by the volatile macro environment while benefiting from an earlier end of season sale period this year. Hong Kong demonstrated ongoing strength, while Southeast Asia, boosted by new stores, achieved strong gains.
Wholesale
In the quarter, total wholesale sales increased by 10% on an underlying basis, 5% reported. For the full Autumn/Winter 2004 season, Burberry anticipates approximately 10% underlying wholesale sales growth. The majority of autumn/winter product shipments are concentrated in the second quarter of each financial year.
Licensing
Total licensing revenues in the quarter increased by 17% on an underlying basis, 9% reported. Licensing revenues from the Japanese market reflected a reduction in management fees payable with respect to specific licences and increases in certain royalty rates, with volumes broadly in line with the previous year. Licensing revenue increases were also driven by strong sales gains at global product licensees.
Burberry will provide a first half trading update on 13 October and release interim results for the six months to September 2004 on 16 November.
Enquiries:
| Burberry | 020 7968 0577 | |
| Stacey Cartwright | CFO | |
| Matt McEvoy | Strategy and IR | |
| John Scaramuzza | Strategy and IR | |
| Brunswick | 020 7404 5959 | |
| Susan Gilchrist | ||
| Sophie Fitton |
Certain statements made in this Trading Update are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from any expected future results in forward looking statements.
This announcement does not constitute an invitation to underwrite, subscribe for or otherwise acquire or dispose of any Burberry Group plc or GUS plc shares. Past performance is not a guide to future performance and persons needing advice should consult an independent financial adviser.