Burberry confident for Christmas as sales lift

After a first-half decline in wholesale sales of outerwear, in particular the iconic trench coat, retail sales accounted for 54% of turnover – up from 45% a year ago.

Burberry reported pre-tax profit down 19.6% to £78.4m for the six months to September 30, from £97m for the same period in 2008.

Burberry’s sales rose 6% to 572.4m during the first half 2009.

Retail sales came in at £311.6m, up 14% on an underlying basis on last year, while wholesale sales fell 23% to £216.1m. Like-for-like retail store sales were up 2%.

Burberry’s wholesale business is forecast to remain weak during the second half, although the decline is expected to slow to 15% against the 23% decline in the first half. Chief financial officer Stacey Cartwright said that in the second half, wholesale orders are likely to be flat year-on-year.

Looking forward to Christmas, Cartwright said: “We are veryn
well positioned in that we carry replenishment inventory on our best-sellers.”

Europe, excluding Spain, showed “double-digit” like-for-like sales growth, while Spain and the US markets notched up double-digit sales declines. Ecommerce sales were up 50% over the first half.

Shore Capital analyst Kate Calvert said: “Burberry is a genuine long-term growth story with significant opportunities both geographically and within its product mix.”