Burberry sales bounced back in Q1, thanks to strong full-price sales of leather goods, outerwear and shoes that younger consumers flocked to in droves.
The British luxury house said it sidelined promotions during the pandemic as consumers purchased at full price and digital purchases more than doubled.
Outgoing CEO Marco Gobbetti, widely credited for Burberry’s transformation strategy and set to leave the CEO post by year end to take on Salvatore Ferragamo’s chief executive role, said the new fiscal year is off to an “excellent start.”
During the quarter, he said, Burberry “continued to roll out our new store concept that will transform how customers experience our brand and product in a uniquely British luxury setting.”
Leather goods were up by double digits, outerwear showed strong growth in jackets, quilts and downs, and footwear “achieved triple-digit growth” over the comparable 2019 period, Burberry said.
Retail sales rose 86 percent to 479 million pounds ($660.5 million) for the three-month period ended June 26 from 257 million pounds ($354 million) in the year-ago quarter. Burberry said comparable store sales rebounded by 90 percent from last year and were up 1 percent from the same pre-pandemic period in 2019.
On a full-price basis, Burberry said it saw strong traction across markets, with comparable sales up 26 percent versus pre-pandemic levels in the same quarter in 2019. The Americas posted comparable sales that more than doubled for the period. Mainland China was up more than 55 percent, while Korea rose over 90 percent.
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“This was driven by new, local, young customers buying across our core categories,” Burberry said. While continued disruptions in several markets resulted in about 11 percent of stores closed during the quarter, only 3 percent of stores were closed at the end of the quarter, although many locations were still operating on reduced hours and in Europe and across Asia the stores were still impacted by the decline in international tourism.
Burberry said new product collections helped to attract new customers to the brand. In the quarter, the brand launched a dedicated handbag campaign centered on the new Olympia bag shape, featuring Kendall Jenner. Consumer engagement in social media posts grew in the double-digits versus result from its prior Pocket campaign. Last month, the brand showed its Men’s Spring Summer 2022 presentation, Universal Passport, that focused on youthful positive and the discovery of new and unknown spaces. The collection resonated with both press and consumers, Burberry said, adding that it recorded double-digit growth in consumer reach when compared with its Autumn Winter 2021 Men’s presentation.
Activations, including 70 leather goods popups and pop-ins in high visibility locations, are driving appointments and customer engagement in stores. In digital, the brand continues to enhance product discovery, including a new Handbag Hub on Burberry.com.
Since the end of the first quarter, Burberry opened its first flagship reflecting its new global design concept in London, on Sloane Street. Three more flagships are slated to open over the course of the next year. Separate from the Sloane Street flagship, seven stores in Asia also showcase the new store concept.
Burberry also noted its intent to become climate positive by 2040, through a series of actions that include accelerating emissions reduction targets across its extended supply chain to 46 percent by 2030 and reaching net zero by 2040.
The company kept fiscal year 2022 guidance, but noted that wholesale sales are expected to increase 60 percent year-over-year in the first half due to a stronger order book. Burberry also noted headwinds on foreign exchange and with adjusted operating profit. It said that comparable store sales are now in line with pre-pandemic trading. The company continues to both exit markdowns at its mainline and digital stores and reduce its outlet business.
“The medium-term guidance for high single digit top line growth and meaningful margin improvement remains firmly on track,” Burberry said.