Burberry Revenue Falls 31% in H1, With Sales Trends Improving

LONDON — Comparable store sales at Burberry made a big recovery in the second quarter of fiscal 2020-21, falling 6 percent compared with 45 percent in the previous quarter. In an interim update Thursday, the company added that comparable store sales returned to growth in the month of October.

In the first half of the year ended Sept. 26, overall revenue was down 31 percent to 878 million pounds, with adjusted operating profit falling 75 percent to 51 million pounds. Reported operating profit was down 56 percent to 88 million pounds.

Marco Gobbetti, Burberry’s chief executive officer, said the brand had been “quick to adapt” throughout the COVID-19 crisis while making further progress on its overall strategic goals.

“While the virus continues to impact sales in EMEIA, 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,” Gobbetti said.

He added that, in this uncertain environment, the company would continue to “localize plans and shift resources,” and leverage Burberry’s digital platform.

Burberry pointed out that when the half began in April, 60 percent of stores were closed globally, with most reopening by the end of June. (Currently, more than 10 percent of its stores are closed globally following the recent lockdowns in the EMEIA region.)

The company said the uptick in the second quarter came from “strong double-digit growth” in mainland China, South Korea and the U.S., while EMEIA, Japan and South Asia Pacific “remain impacted by the significant reduction in tourism.”

The leather goods and e-commerce divisions outperformed in the half, Burberry noted.

The company was cautious in its full-year outlook, saying that while it was “encouraged” by the recovery in the second quarter, it remains “conscious of the uncertain macro-economic environment.”

In the coming months, Burberry said it plans to reduce markdowns, which will create a revenue headwind in the second half of the year, with the main impact in the third quarter.

The company said the decision to reduce markdowns “will serve the long term interest of the brand. We are well positioned to continue to drive performance and deliver growth in the medium term,” Burberry added.

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