12th Jan 2005 07:00
Burberry Group PLC12 January 2005 Burberry Group plc Third Quarter 2004/05 Trading Update Burberry Group plc reports on trading for the third quarter ended 1 January2005. Financial Highlights • Total revenues increased 7% on an underlying* basis • Retail sales increased 6% underlying driven by new and refurbished stores • Wholesale revenues increased 5% underlying; Burberry continues to anticipate mid-to-high single digit wholesale sales growth for Spring/Summer 2005 season • Licensing revenue increased 14% underlying driven by global licensee gains Third Quarter Nine Months ----------------------------------------------------- ---------------------------------------------------- 2004/05 2003/04 % change 2004/05 2003/04 % change --------------------- -------- -------------------- -------------------- -------- --------------------£ million Reported Underlying* Reported Reported Underlying* Reported Underlying* Reported Reported Underlying* --------------------- -------- -------------------- -------------------- -------- -------------------- Retail 96 100 94 1 6 207 221 203 2 9Wholesale 47 49 47 2 5 245 255 230 7 11Licence 18 18 16 15 14 57 58 46 23 25 --------------------- -------- -------------------- -------------------- -------- --------------------Total 161 167 157 3 7 509 534 479 6 12 * Underlying figures are calculated at constant exchange rates. Commenting on the trading results, Rose Marie Bravo, Chief Executive, stated,"In the context of a highly promotional environment, Burberry held its courseand delivered a solid result for the quarter. With favourable initial consumerresponse to the spring product, strong editorial presence and an excitingadvertising campaign, Burberry is well-positioned as we enter the season." Total revenues Total revenues in the third quarter ended 1 January 2005 increased by 7% on anunderlying basis (i.e. at constant exchange rates), 3% reported, compared to thesame period last year. Retail Retail sales accounted for approximately 59% of total revenue in the period. Retail sales in the third quarter increased by 6% underlying, 1% reported,driven by contributions from newly opened and refurbished stores. In the contextof highly promotional retail environments in the US and UK, Burberry maintainedits end of season sales strategy with the timing of sale periods remainingconsistent with that of the previous year. During the quarter, Burberry openedstores in Rome, Italy and Boca Raton, Florida, added two accessory concessionsin Spain and completed major store refurbishments, including Paris and SanFrancisco. On a year over year basis, average selling space increasedapproximately 8% in the quarter. Retail sales growth varied by region. In the US market, despite a challengingouterwear season, muted consumer response to some classic styles anddeliberately restrained outlet store sales, retail sales increased in line withspace growth in the period. In Europe, Continental markets generally continuedto perform well, while the UK market was weak for the quarter. In Asia, sales inKorea continued to be volatile as a result of the difficult macro environmentresulting in a flat overall performance for the quarter. Hong Kong experiencedvigorous growth throughout the period, while Southeast Asia, boosted by newstores, achieved strong gains. Burberry remains on schedule to open a minimum of two concessions during thefourth quarter, resulting in the addition of approximately 7% retail sellingarea for the 2004/05 financial year. In addition, several important storerefurbishments will commence in the fourth quarter. For the 2005/06 financialyear, the Group has to date signed leases for new stores in Naples, Florida andSan Antonio, Texas. Wholesale Wholesale sales accounted for approximately 29% of total revenue in the period. In the quarter, total wholesale sales increased 5% underlying, 2% reported. Onthe basis of orders received to date, Burberry continues to anticipatemid-to-high single digit growth for the Spring/Summer 2005 season. Spring/summermerchandise shipments are concentrated in the fourth quarter of each financialyear. During the quarter, franchise partners opened the following Burberry locations:3 stores in China; a second store in Moscow (Russia); a second store in Dubai(UAE); and stores in Copenhagen (Denmark) and Sao Paolo (Brazil). Licensing Total licensing revenues in the quarter increased by 14% on an underlying basis,15% reported, reflecting strong gains by global product licensees. In Japan,aggregate volumes declined as a result of licensee cancellations/transitions, asoft apparel market and Burberry's programme to reduce selectively thedistribution of certain products in that market. These declines were partiallyoffset by increases in certain royalty rates. Global product licences drovegains in the quarter led by fragrances, which benefited from the ongoingstrength of the Burberry Brit product line. ConclusionAs a whole, this performance is consistent with management's expectations forthe financial year. Burberry will provide a second half trading update on 13 April. Enquiries: Burberry 020 7968 0577Stacey Cartwright CFOMatt McEvoy Strategy and IRJohn Scaramuzza Strategy and IR Brunswick 020 7404 5959Susan GilchristLaura CummingsRobert Gardener Certain statements made in this Trading Update are forward looking statements.Such statements are based on current expectations and are subject to a number ofrisks and uncertainties that could cause actual results to differ materiallyfrom any expected future results in forward looking statements. This announcement does not constitute an invitation to underwrite, subscribe foror 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 adviceshould consult an independent financial adviser. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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