Burberry Sales Exceed Analysts’ Estimates as Digital Outperforms

Burberry Spring/Summer 2014 campaign | Source: Burberry
LONDON, United Kingdom — Burberry Group Plc, the U.K.’s largest luxury-goods maker, reported quarterly revenue that exceeded estimates as increased marketing spending helped attract shoppers over the holiday period.
Retail revenue advanced 14 percent to 528 million pounds ($866 million) in the three months ended Dec. 31, the London- based company said today in a statement. Analysts predicted 518 million pounds, according to the median of 12 estimates compiled by Bloomberg. Sales at stores open at least a year rose 12 percent, decelerating from the first half, when growth on that basis was 13 percent.
While shopper traffic remained weak in stores, investment in areas such as service and collect-in-store helped digital sales outperform, Burberry said. Outerwear and large leather goods contributed about half of so-called mainline growth, the trenchcoat maker said. Comparable sales gained by at least 10 percent in the Asia Pacific region.
“The macro environment remains uncertain,” Burberry’s outgoing Chief Executive Officer Angela Ahrendts said in the statement. “At current levels, exchange rates will be a significant headwind in the second half and beyond.”
Burberry is targeting a “modest” increase in full-year retail/wholesale operating profit margin, it said, repeating a November forecast.
Burberry’s creative director Christopher Bailey will become CEO later this year, succeeding Angela Ahrendts when she leaves for Apple Inc.
By Andrew Roberts; Editors: Paul Jarvis, Celeste Perri