12th Jul 2006 07:00
Burberry Group PLC12 July 2006 Burberry Group plc First Quarter Trading Update 12 July 2006. Burberry Group plc reports on trading for the first quarter ended30 June 2006. Highlights • Total revenue increased 12% on an underlying* basis • Retail sales rose 19% underlying driven by new and existing stores • Wholesale revenues increased 2% underlying - Burberry continues to anticipate a low single digit percentage underlying increase in wholesale sales for the first half • Licensing revenue increased 11% underlying Revenue by geographical origin (statutory accounts format) First Quarter to 30 June £ million 2006 2005 % change Europe 44 39 14Spain 15 12 27North America 36 32 12Asia 41 31 30Total 135 114 19 Revenue by channel of distribution First Quarter to 30 June % change £ million 2006 2005 Reported Underlying* Retail 82 61 35 19Wholesale 38 39 (3) 2Licence 16 14 11 11Total 135 114 19 12 * Underlying figures exclude the financial effect of the Taiwan Acquisition andthe portion of Burberry's business in Spain affected by the retail conversion,in both reporting periods. In addition, underlying figures are calculated at thesame exchange rates used in the 2005/06 year's reported results for the period.Burberry completed the acquisition of the operations and assets of itsdistributors in Taiwan in August 2005 (the "Taiwan Acquisition") and initiatedactions related to the retail conversion in Spain during the third quarter of2005/06. Commenting on the trading results, Angela Ahrendts, Chief Executive Officer,stated, "The strong first quarter results reflect the continued momentum ofBurberry's retail operations across our primary product categories andgeographical regions. As a whole, performance in this period is consistent withexpectations for the full financial year." Total revenue Total revenue in the first quarter increased 12% on an underlying basis (i.e.adjusted for (i) the Taiwan acquisition, (ii) the portion of Burberry's businessin Spain affected by the retail conversion and (iii) exchange rate differences).The Taiwan acquisition and Spain retail conversion shift sales from Burberry'swholesale channel to its retail channel. In determining underlying performance,the financial effects of the relevant businesses are excluded from bothreporting periods. Total reported revenue increased 19% in the first quarter. Retail Retail sales accounted for approximately 61% of total reported revenue in thequarter. Retail sales in the period increased 19% underlying, 35% reported, driven bycontributions from newly opened stores and strong gains at existing stores. Allthree major product categories performed well in the period. The Taiwanacquisition and Spain retail conversion contributed approximately 14 percentagepoints of the reported gain. During the quarter, Burberry opened a store inAtlantic City (New Jersey), a replacement store in Taipei and one outlet store.The Group also opened two accessory concessions in Spain. On a year on yearbasis, underlying average net retail selling space increased approximately 10%in the quarter. Burberry remains on schedule to increase underlying net retailselling space by a minimum of 10% for the financial year. Retail performance was generally strong across the regions. In the US, new andrefurbished stores, supplemented by gains at existing locations, drove salesgrowth. With ongoing momentum at existing stores, the majority of ContinentalEuropean markets achieved strong gains. In the UK, existing stores produced adouble digit increase in the period. Asia demonstrated continued underlyingstrength primarily on the performance of existing stores. Wholesale Wholesale sales accounted for approximately 28% of total reported revenue in thequarter. In the period, total wholesale sales increased 2% on an underlying basis, anddeclined 3% reported. The majority of autumn/winter product shipments areconcentrated in the second quarter of each financial year. Burberry continues toanticipate a low single digit percentage underlying increase in first halfwholesale sales relative to the previous year. On a reported basis, the Spainretail conversion will result in a shift of sales from Burberry's wholesalechannel to its retail channel in the first half. In conjunction with a local partner, the Group opened a net one franchise storein China during the quarter. Licensing Total licence revenue in the quarter increased 11% on both an underlying andreported basis. In Japan, licence revenue achieved a solid underlying gainreflecting modest volume growth and increases in certain royalty rates. Burberrycontinues to expect a moderate underlying revenue decline in Japan for the fullfinancial year as a result of licence transitions and other ongoing efforts toenhance brand positioning in this market. Strong growth in product licencerevenue was led by fragrances, which benefited from the successful launch ofBurberry London for women during spring 2006. Burberry London for men isscheduled to launch in autumn 2006. Burberry will provide a first half trading update on 11 October and releaseinterim results for the six months to 30 September 2006 on 14 November. Enquiries: Burberry 020 7968 0577Stacey Cartwright CFOMatt McEvoy Strategy and IRJohn Scaramuzza Strategy and IR Brunswick 020 7404 5959Susan GilchristLaura CummingsRobert Gardener The financial information contained in this Trading Update has not been audited. 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 shares. Pastperformance 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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