Burberry Group Plc, the UK luxury goods company, announced that first quarter revenue dropped by 4 per cent in the three months to June 30, as a result of a fall in wholesale revenues.
The luxury goods firm said that although total revenue of $375 million was down on a constant currency basis during the company’s first fiscal quarter, the revenue was up by 8 per cent on a reported basis.
Retailers have been hit hard by a global economic downturn and while there have been signs of stabilization, a recovery is by no means assured.
Sales at the wholesale division declined 21 percent as department stores cut stock levels and the company shut down the Thomas Burberry line.
By region, Europe and Asia retail operations showed double-digit growth after a strong performance in the U.K. and Korea, while the United States and Spain remain difficult, it said.
First quarter highlights
- Total revenue down 4% underlying, up 8% reported
- Retail revenue up 12% underlying, with comparable store sales flat year-on-year
- Europe and Asia up double-digit, driven by UK and Korea
- United States and Spain remain difficult
- Wholesale revenue down 28% underlying in this small quarter
- Consistent with guidance of down about 25% for H1
- Around 15% down as wholesale customers adjust inventory levels
- Around 10% down from Burberry’s own actions and closures
- Strong brand momentum supporting department store share gains
- Licensing revenue down 3% underlying
- Guidance unchanged for full year
- Underlying licensing revenue to decline by 10-15%
- More than offset by currency benefits at reported level
- Further strategic and operational progress
- Non-apparel and childrenswear performed strongly
- Three franchise stores opened in Emerging Markets
- SAP went live in US
- New Americas HQ and showrooms opened at 444 Madison Avenue
- Benefits from cost efficiency programme on track
- Underlying change is calculated at constant exchange rates.
Further details on burberryplc.com.
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