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Burberry sales strong but currencies to knock profits

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Strong online sales helped luxury brands specialist Burberry (LON:BRBY) lift second half revenues by almost a fifth though it warned currencies were having a material impact on profits.

Total sales rose by 19% to £1.3bn in the six months to March, with retail sales 13% better and wholesale up by 11%.

Digital outperformed in all regions, Burberry said, while there was also the benefit of eleven new mainline stores, including the new flagship at the Kerry Centre, Shanghai.

Men's accessories, men's tailoring and the Prorsum range were the stand-out sellers, Burberry said.

Wholesale revenue was ahead of guidance due to re-phasing of deliveries and re-orders, while the new Beauty division contributed £93mln, driven by the two Brit Rhythm fragrance launches.

Angela Ahrendts, chief executive, said she was pleased with the second half but cautioned that current exchange rates were a material headwind in what remains "an uncertain macro environment".

“With the management transition well underway, Burberry begins a new year with Beauty firmly established as the fifth product division and investment in flagship markets, such as Shanghai, further increasing the brand's appeal to the core luxury customer at home and when travelling.”

Quick facts: Burberry Group PLC

Price: 1738 GBX

LSE:BRBY
Market: LSE
Market Cap: £7.04 billion
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