Burberry predicts 35 per cent profit surge this year
British fashion house Burberry has predicted full year operating profit will rise by 35 per cent in its latest trading update.
The fashion powerhouse reported third quarter revenue of £723m, up by five per cent compared to same period last year with the brand registering a quarter-to-quarter dip in sales of three per cent. In a boost for investors the company said that a £150m share buyback programme is on course for completion before the end of the year.
“Full-price sales continued to grow at a double-digit percentage compared with two years ago, accelerating from the previous quarter and reflecting a higher quality business,” said Burberry Chair Gerry Murphy, pointing out that the company has seen full price comparable store sales climb by 26 per cent compared to the same period in 2020.
A trading update released today revealed that while Burberry’s sales have grown by eight per cent in the US market which helped to offset a dip of 17 per cent in the EMEIA region (Europe, Middle East, India and Africa) caused by a slowdown in tourism.
“Our focus categories outerwear and leather goods performed strongly as we continued to attract new, younger consumers to the brand. Despite the ongoing challenges of the external environment, we are confident of finishing the year strongly and providing an excellent platform on which to build when our new CEO Jonathan Akeroyd joins in April,” Murphy added.
Commenting on the results Chris Beauchamp, the chief market analyst for trading platform IG Group, said “this morning’s numbers have given Burberry the reason to rally, a nice change from the focus on inflation and the cost of living squeeze.
“The chasm in the global economy is clearly illustrated here, as the luxury goods sector makes headway while everyone else seems to worry about the rising cost of daily essentials. A further recovery in the global economy should help Burberry to meet the targets in its update today, and a return to the summer highs now looks likely,” Beauchamp added.
Shares are up 5.95 per cent at the open on the back of the trading update.
Read more: Burberry’s profits powered by soaring Americas sales