REG - Burberry Group PLC - Trading Update

BurberryAnnouncement

12/01/2024 07:00

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RNS Number : 4639Z  Burberry Group PLC  12 January 2024

12 January 2024

BURBERRY GROUP PLC

TRADING UPDATE

"We are continuing to deliver the transition to our new modern British luxury
creative expression for Burberry which started appearing in our stores in
early Autumn. We are still in the early stages of executing on this, which has
become more challenging against the backdrop of slowing luxury demand. We
experienced a further deceleration in our key December trading period and we
now expect our full year results to be below our previous guidance. We remain
confident in our strategy to realise Burberry's potential and we are committed
to achieving our £4 billion revenue ambition."

- Jonathan Akeroyd, Chief Executive Officer

 

RETAIL REVENUE 13 WEEKS ENDED 30 DECEMBER 2023

                          30 December  31 December  % change
 £ million                2023         2022         Reported FX  CER*
 Retail revenue           706          756          -7%          -2%
 Comparable store sales*  -4%          +1%
 Contribution from space  +2%

*See page 2 for definition

Comparable store sales by region

 Q3 FY24 vs LY           Asia Pacific*  EMEIA  Americas
 Comparable store sales  +3%            -5%    -15%

*Asia Pacific consists of: Mainland China +8%, South Asia Pacific +2%, Japan
+9%, South Korea -10%

 

OUTLOOK

We remain confident in our strategy to realise Burberry's potential as the
modern British luxury brand, and we are committed to achieving our £4bn
revenue ambition.

The slowdown in luxury demand is having an impact on current trading. In this
context, we now expect adjusted operating profit for the financial year ended
30 March 2024 to be in the range of £410m to £460m, below previous guidance.

Based on foreign exchange rates effective as of 29 December 2023, we now
expect a currency headwind of c.£120m to revenue and c.£60m to adjusted
operating profit.

The person responsible for arranging the release of this announcement on
behalf of Burberry Group plc is Gemma Parsons, Company Secretary.

 

 

 

 

 

The financial information contained herein is unaudited.

 

All metrics and commentary in this presentation are at reported FX and exclude
adjusting items unless stated otherwise.

Constant exchange rates (CER) removes the effect of changes in exchange rates.
The constant exchange rate incorporates both the impact of the movement in
exchange rates on the translation of overseas subsidiaries' results and on
foreign currency procurement and sales through the Group's UK supply chain.

Comparable sales are the year-on-year change in sales from stores trading over
equivalent time periods and measured at constant foreign exchange rates. It
also includes online sales. This measure is used to strip out the impact of
permanent store openings and closings, or those closures relating to
refurbishments, allowing a comparison of equivalent store performance against
the prior period. The measurement of comparable sales has not excluded stores
temporarily closed as a result of the COVID-19 outbreak.

Certain financial data within this announcement have been rounded. Growth
rates and ratios are calculated on unrounded numbers.

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.

This trading update constitutes our quarterly trading update which was
originally scheduled for 19 January 2024.

 

ENQUIRIES

 Investors and analysts                                    020 3367 3524
 Julian Easthope  VP, Investor Relations                   julian.easthope@burberry.com (mailto:julian.easthope@burberry.com)
 Media                                                     020 3367 3764
 Andrew Roberts   SVP, Corporate Relations and Engagement  andrew.roberts@burberry.com

 

Burberry will issue its Preliminary results for the 52 weeks ending 30 March
on 15 May 2024.

Certain statements made in this announcement are forward-looking statements.
Such statements are based on current expectations and are subject to a number
of risks and uncertainties that could cause actual results to differ
materially from any expected future results in forward-looking statements.
Burberry Group plc undertakes no obligation to update these forward-looking
statements and will not publicly release any revisions it may make to these
forward-looking statements that may result from events or circumstances
arising after the date of this document. Nothing in this announcement should
be construed as a profit forecast. All persons, wherever located, should
consult any additional disclosures that Burberry Group plc may make in any
regulatory announcements or documents which it publishes. All persons,
wherever located, should take note of these disclosures. This announcement
does not constitute an invitation to underwrite, subscribe for or otherwise
acquire or dispose of any Burberry Group plc shares, in the UK, or in the US,
or under the US Securities Act 1933 or in any other jurisdiction.

 

Notes to editors

·          Burberry is a British luxury brand, headquartered in
London

·          Burberry is listed on the London Stock Exchange (BRBY.L)
and is a constituent of the FTSE 100 index. ADR symbol OTC:BURBY. BURBERRY,
the Equestrian Knight Device, the Burberry Check, and the Thomas Burberry
Monogram and Print are trademarks belonging to Burberry.

·          At 30 December 2023, globally Burberry had 225 retail
stores, 139 concessions, 57 outlets and 32 franchise stores, excluding pop-up
stores.

 

 

APPENDIX

Based on effective FX rates as of 29 December 2023, in FY24 we now expect a
c.£120m headwind from exchange rate movements on revenue and a c.£60m
headwind on adjusted operating profit. This compares to guidance given in
November for a currency headwind of c.£110m to revenue and c.£60m to
adjusted operating profit.

 

 Exchange rates    Forecast effective average rates for FY24     Actual average exchange rates
 £1=               29 December 2023       25 October 2023        H1 FY24     H1 FY23     FY23
 Euro              1.16                   1.15                   1.16        1.17        1.16
 US Dollar         1.26                   1.23                   1.26        1.21        1.20
 Chinese Renminbi  8.99                   8.91                   8.97        8.16        8.27
 Hong Kong Dollar  9.84                   9.65                   9.86        9.50        9.43
 Korean Won        1,646                  1,694                  1,654       1,579       1,577

 

Detailed guidance for FY24

 Item                                Financial impact
 Impact of retail space on revenues  Space is expected to be broadly stable in FY24.

 Wholesale revenue                   Wholesale revenue is expected to decline by a high-single digit percentage in
                                     FY24.
 Tax                                 We expect the adjusted effective tax rate to be around 29%.
 Currency                            Based on 29 December effective foreign exchange rates, the impact of
                                     year-on-year exchange rate movements is expected to be a c.£120m headwind on
                                     revenue and c.£60m headwind on adjusted operating profit.
 Capex                               Capex is expected to be around £200m including over 50% of the store network
                                     updated by end of the year.
 Share buyback                       £400m share buyback completed on 31 October 2023.

Note: Guidance based on CER at FY23 rates

 

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