Burberry has recorded a 4% drop in sales over the Christmas quarter, but expects to recover from losses made in the first half of its financial year after a strong performance in the US.
The fashion retailer’s shares rose by as much as 15% on Friday as it posted a fall in retail sales for the three months to 28 December, which was much better than the 12% drop analysts had expected.
Burberry, known for its signature expensive trenchcoats, bags and scarves, reported a 9% year-on-year fall in comparable stores sales in Asia Pacific, a solid improvement from the 28% decline experienced in the previous quarter.
In Europe, Middle East, India and Africa, the retailer had a 2% year-on-year fall in the quarter, after a 10% fall in the previous quarter.
The US proved to be the highlight of the Christmas season, with shoppers driving retail sales up 4% in the final quarter of the year, and Burberry saying that its refurbished store in New York performed well.
The company gave credit to its new “It’s Always Burberry Weather” outerwear campaign, part of a wider reinvention and rejuvenation of the brand, as well as its “Wrapped in Burberry” festive campaign.
The company made a £41m operating loss in the first half of its financial year.
On Friday, Burberry said: “While we recognise we are still early in our transformation we are encouraged by the response from customers and partners over the festive period. In light of our third-quarter performance, it is now more likely our second-half results will broadly offset the first-half adjusted operating loss, notwithstanding the uncertain macroeconomic environment.”
after newsletter promotion
Analysts at RBC said that the relatively positive results were a “first (and early) step in the right direction”.
