Interim results for 26 weeks ended 30 September 2023

“We made good progress against our strategic goals, executing our priorities at pace. We continued to build momentum around our new creative vision with the launch of our Winter 23 collection in September, the first designed by Daniel Lee. While the macroeconomic environment has become more challenging recently, we are confident in our strategy to realise our potential as the modern British luxury brand, and we remain committed to achieving our medium and long-term targets.” 

Jonathan Akeroyd
Chief Executive Officer

• Q2 comparable store sales increased 1%, with EMEIA +10%, Asia Pacific +2%, Americas -10%
• Significant progress on our plan, executing our priorities at pace
• Good performance across core outerwear and leather goods categories
  • Outerwear comparable store sales up 21% in H1 and 10% in Q2
  • Leather goods comparable store sales up 8% in H1 and 3% in Q2
• Delivered a more coherent brand aesthetic with campaigns generating significantly improved brand clarity, supported by a series of high-impact activations
• Launched Winter 23 collection, broadening distribution and ensuring greater visibility in stores compared with previous seasons; new product complements core offer and early indicators as encouraging
• Continued investment in distribution, opening or refurbishing 33 stores in the half and refreshed website in line with our new creative vision
• Achieved efficiency improvements across the value chain in terms of product availability, on time delivery and material waste re-use
• Strengthened supply chain with the completion of an outerwear acquisition in Italy in early October
• £400m share buyback completed at end of October, with £200m completed in H1
• Interim dividend of 18.3p, +11% based on 30% of FY23 full year dividend

Business Review

In November 2022, we set out our strategy to realise Burberry’s potential as the modern British luxury brand with a medium-term target to grow sales to £4bn and a longer-term ambition to reach £5bn in revenue. During the half, we made significant progress against our plan, executing our priorities at pace.

We continued to invest in our creative vision with campaigns and activations that were recognisably Burberry and told a coherent brand story. Our Winter 23 campaign showcased our new offer with a distinctive visual language that celebrated our new and enduring brand codes and placed product centre stage. The strong level of interest from fashion editors globally led to higher volumes of editorials with more than two times the reach of our previous Winter campaign.

We complemented the launch of Winter 23 with a series of city takeovers in high-impact locations. Our “Burberry Streets” activations in London, Seoul and Shanghai celebrated the art of exploration and brought our brand to life through immersive experiences, installations and events. These initiatives contributed to our highest level of brand clarity in the last three years as well as continued growth in consumers who associate Burberry with ‘Britishness’ and ‘Heritage’, which are key to our luxury positioning.

In terms of our core product categories, outerwear sales increased 21% in the half. This was driven by the strong performance of Heritage rainwear across both men’s and women’s. Leather goods sales advanced 8%, led by 14% growth in bags with ongoing momentum in icons such as the Vintage Check and new shapes introduced for Winter 23 such as the Knight bag and Trench tote gaining traction. In parallel, we continued to expand and evolve ready-to-wear, and introduced a more complete shoe offering.

The Winter 23 collection, the first designed by Daniel Lee, arrived in stores in September. Across all categories, we supported the launch with a higher level of investment in new product than in previous seasons, enabling us to broaden distribution and ensure greater visibility in our stores. The new product complements our existing strong core offer and while it is still too soon to have an in-depth read on commercial performance, the early indicators are encouraging.

We continued to build on this momentum with our Summer 24 show, also in September, that was well attended by high profile talent from the worlds of music, creative arts and sports. Through the collection, we further developed the aesthetic and codes for the brand across leather goods, shoes and ready-to-wear. The response has been highly positive with global reach from press coverage more than doubling season on season.

In addition, our beauty business generated an excellent performance in the half, driven by the successful launch of our latest fragrance Burberry Goddess.

We continued to invest in distribution, opening or refurbishing 33 stores in the half including New Bond Street London, Rodeo Drive Los Angeles and Omotesando Tokyo. Financials of the updated stores continue to show both store productivity and AUR up mid-teens percentage against equivalent existing stores. We also refreshed our ecommerce website Burberry.com. Launched on September 6th to coincide with the arrival of our Winter 23 collection in stores, the website offers customers a more elevated and cohesive experience aligned with our new brand identity.

We further strengthened our supply chain in our core product categories with completion in early October of the acquisition of a product development business from our longstanding supplier Pattern SpA. This strategic investment will enhance our technical outerwear capabilities and give us greater control over the quality, cost, delivery, and sustainability of our offer. We welcomed our new colleagues to Burberry.

At the same time, we maintained support for our communities, partnering with Tate Britain for ‘Sarah Lucas: HAPPY GAS’, an exhibition honouring one of Britain’s leading artists. We also partnered with British artist Keith Khan and LEEDS 2023 to create a series of bespoke textile artworks at the Burberry Mill in Keighley to celebrate the 33 distinctive and diverse wards of the city of Leeds.

We continued to progress our sustainability agenda, introducing plastic-free packaging as part of our commitment to eliminate plastic from our consumer packaging by FY26. We also expanded our aftercare services to help more of our customers extend the life of their products.

Guidance

We are confident in our strategy and remain committed to achieving our medium and long-term targets. The slowdown in luxury demand globally is having an impact on current trading. If the weaker demand continues, we are unlikely to achieve our previously stated revenue guidance for FY24*. In this context, adjusted operating profit would be towards the lower end of the current consensus range (£552m-£668m)**.

Based on foreign exchange rates effective as of 25 October 2023, we now expect a reduced currency headwind of c.£110m to revenue and c.£60m to adjusted operating profit.

Enquiries

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