“Burberry is a unique British company with an extraordinary history and heritage and it is a privilege to take the reins in this next phase. The company has made great progress over the last five years to elevate the brand, product and customer experience into the luxury space. I look forward to setting out my plans for building on these strong foundations and accelerating growth at the interim results in November.”
Jonathan Akeroyd
Chief Executive Officer
Period ended £ million |
53 weeks ended 2 April 2022 |
52 weeks ended 27 March 2021 |
YoY % change 53 vs 52-week Reported FX |
YoY % change 52 vs 52-week CER |
| Revenue | 2,826 | 2,344 | 21 | 23 |
| Retail comparable store sales* | 18% (6% vs LLY**) | (9%) | ||
| Retail full-price comparable store sales* | 24% (30% vs LLY**) | 7% | ||
| Adjusted operating profit* | 523 | 396 | 32 | 38 |
| Adjusted operating profit margin* | 18.5% | 16.9% | +160bps | +210bps |
| Adjusted Diluted EPS (pence)* | 94.0 | 67.3 | 40 | 49 |
| Reported operating profit | 543 | 521 | 4 | |
| Reported operating profit margin | 19.2% | 22.2% | ||
| Reported diluted EPS (pence) | 97.7 | 92.7 | 5 | |
| Free cash flow* | 340 | 349 | ||
| Dividend (pence) | 47.0 | 42.5 | 11 |
*See full announcement for definitions of alternative performance measures **LLY is compared with FY20
FY22 is a 53-week year. The comparative period is 52 weeks to 27 March 2021. To aid understanding, we are providing CER percentage changes on a 52-week basis while absolute figures will be on a reported basis including the 53rd week unless otherwise stated. FY23 will be a 52-week year.
We maintain our guidance of high single-digit revenue growth and meaningful margin accretion at CER in the medium-term. Our outlook is dependent on the impact of COVID-19 and rate of recovery in consumer spending in Mainland China. While the current macro-economic environment creates some near term uncertainty, we are actively managing the headwind from inflation. Based on 6 May 2022 spot rates we expect a currency tailwind of £159m on revenue and £92m on adjusted operating profit in FY23.
FY22 was the first year of the growth and acceleration phase of our strategy. In this chapter, our focus is on leveraging our unique brand equity to deliver sustainable, high-quality growth, while continuing our efforts to do well by doing right.
Despite a continuing challenging external environment, FY22 revenue increased 10% vs FY20 and 23% vs FY21 at CER. Full-price comparable store sales advanced 30% vs LLY as our strategy to exit mainline and digital markdowns drove a material enhancement in the quality of our revenue streams. Regionally, Americas led full-price comparable store sales growth with sales almost doubling in the US compared with FY20. Full-price comparable store sales were also strong in South Korea where they increased 81% and in Mainland China where they rose over 50% compared with FY20, despite regional lockdowns impacting our performance, particularly in March. We also saw improving trends in EMEIA despite an ongoing headwind from reduced tourists due to COVID-19 related travel restrictions.
We improved profitability with the adjusted gross margin, up 60bps to 70.6% at CER despite pressures from Brexit duties and supply chain inflation. Adjusted operating profit came in ahead of guidance, up 38% at CER vs FY21 to £523m at reported rates. FY22 also delivered a marked improvement in the operating leverage with adjusted operating margin increasing to 19.0% at CER (18.5% reported).
In the fourth quarter, we held our first in-person runway show in two years with the unveiling of our Autumn/Winter 2022 collection. The show was a celebration of British culture, inspired by London and our unique heritage, and highlighted icons from the Burberry archive, including our Equestrian Knight Design. Compared to the Autumn/Winter 2021 presentations, show views were up triple digits helping to drive significant growth in followers on Instagram and global press coverage was up double digits. In March, we collaborated with Supreme to launch an exclusive selection of pieces which sold out within seconds on Burberry.com and created a lot of excitement around the stores and across social media.
We maintained our focus on strong, localised marketing campaigns, engaging with customers through innovative, luxury experiences. In the fourth quarter, we launched an immersive Spring/Summer 2022 experience at our flagship store on Rodeo Drive, Beverly Hills. As part of the store takeover, the exterior facade of the building was enveloped in a kaleidoscopic abstract print that we animated via an Instagram filter. Overall, our programme of brand activities in the quarter generated strong reach and engagement globally with a triple digit increase year-on-year in follower growth rate on Instagram and continued strength in earned reach, up strong double digits vs last year. In addition, we continued to see strong momentum on Tik Tok passing the one million follower milestone in the fourth quarter.
During the year, we invested in our focus categories outerwear and leather goods. FY22 full-price outerwear sales grew 39% vs LLY supported by our first dedicated campaign celebrating our iconic offer. Leather goods also delivered a strong performance, with FY22 full-price sales up 28% vs LLY with the fourth quarter benefitting from the Frances tote, a recent extension to the TB family as part of our Summer 22 collection. As we enter FY23, we are excited about the recent launch of the Lola bag campaign starring Bella Hadid, Lourdes Leon, Jourdan Dunn and Ella Richards and supported by a series of global World of Lola pop-ups and pop-ins.
We elevated the customer experience with the roll out of our new store concept. In total, we now have 47 stores in the new design including our Paris flagship on Rue Saint Honoré, with the opening marked by the store exterior draped in the iconic Burberry check in the Birch Brown colourway. The new store concept is transforming how our customers experience our brand and product and is supporting revenue growth. We have a further 65 stores planned for FY23, meaning that by the end of the fiscal year, around a quarter of our directly-operated stores will carry the new design. Digital remains a key focus area for the business. We strengthened the integration between our offline and online channels, expanding our aftercare offer, enabling customers to access bespoke services via Burberry.com and ensuring our sales associates can offer a truly omnichannel experience for consumers.
We continued to take industry-leading steps to advance our decarbonisation agenda and are proud to have substantially met all targets we set as part of our 2017-2022 responsibility strategy. We are now carbon neutral across our own operations globally; all the electricity we use is from renewable sources; and almost all our products have a positive attribute, meaning they carry a social or environmental benefit. This strong foundation underpins our new ambition to become Climate Positive by 2040, not only by becoming net zero 10-years ahead of the 1.5-degree pathway set out in the Paris Agreement but also by further reducing emissions across our extended supply chain. At the same time, we set a new biodiversity strategy, focused on protecting and restoring nature, expanding support for farming communities and developing regenerative supply chains.
We continued to support communities throughout the year, exceeding our goal of positively impacting one million people by 2022 . We partnered once more with Marcus Rashford MBE and charities across the UK, US and Asia to provide literacy skills and safe creative spaces for underrepresented youth. We extended our support for more equitable vaccine distribution to tackle the global pandemic, with further donations to the UNICEF COVID-19 Vaccine Appeal through The Burberry Foundation. With millions of lives impacted by the humanitarian crisis in Ukraine, we also donated to the British Red Cross Ukraine Crisis Appeal, Save the Children and UNICEF to help provide essential services to displaced families, and we are donating more than 20,000 blankets to Ukrainian refugees that we manufactured in Castleford and with our supply partners in Italy.
We also maintained momentum on our global Diversity and Inclusion strategy. Key initiatives include rolling out allyship training across the business, introducing our first-ever global bereavement policy, menopause support and policy for those experiencing domestic violence. This year, we were proud to be the inaugural sponsor of the British Diversity Awards, honouring changemakers and supporting Galop, the chosen Charity of the Year. On International Women’s Day 2022, we announced our ambition to be the best place to work for women in the industry. We are proud to have been recognised for our efforts, including being recognised in the Bloomberg Gender-Equality Index for a second consecutive year and featuring as a best performer in the inaugural FTSE Women Leaders report. We remain focused on continuous improvement to drive positive change both within Burberry and beyond.
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