Burberry is forecasting that full-year profits will grow 35% compared with last year, as strong sales of its luxury clothing and bags in Asia and the US drive its trading rebound from the pandemic.
The British luxury brand said full price sales were up 26% compared with pre-pandemic levels in the three months to 25 December and 10% growth in the previous quarter, as it sold more full-price items including Burberry trainers, raincoats and bags.
The company said it now expected to increase full year profits by 35% year on year to about £500m, up from City analysts’ previous expectation of just over £470m.
Burberry credited the strong profits growth to designer Riccardo Tisci’s products attracting younger shoppers.
Sales in Asia rose by 22% on two years ago in the quarter, accelerating from 5% in the prior three months amid strong sales of coats, puffer jackets and different versions of its Lola bag. In Europe sales were down 4% on two years ago with low numbers of tourists who accounted for 40% of Burberry’s sales before the pandemic.
But the drop was a dramatic improvement on the 27% dive in the previous quarter as chief operating officer Julie Brown said Burberry’s new image was proving attractive to more local shoppers.
Gerry Murphy, the chair of Burberry said: “Despite the ongoing challenges of the external environment, we are confident of finishing the year strongly and providing an excellent platform on which to build when our new chief executive Jonathan Akeroyd joins in April.”
Burberry is in the process of switching management, after it poached Akeyroyd from Versace to take over as chief executive from Marco Gobbetti, who was part way through a turnaround plan aimed at taking Burberry further upmarket, with prices to rival its French and Italian rivals. Gobbetti will step down at the end of the year, after saying he wanted to return home to Italy.
Gobbetti brought Tisci to Burberry in 2018, having previously hired him at the luxury brand Givenchy.