Burberry’s outlook depends on the impact of COVID-19 and the speed at which consumer spending recovers in Mainland China.
Despite the continuing challenging external environment, British fashion house Burberry’s fiscal year 2022 (FY22) revenue grew 10% year-on-year and 23% year-over-year according to CER. Full-price equivalent in-store sales increased 30% over LLY as the exit strategy from the mainstream and digital markup drove a significant improvement in the quality of the revenue streams .
By region, the Americas led the way in price-to-price store sales growth, with sales in the U.S. nearly doubling year-over-year in fiscal 20. In-store sales Full-price equivalents also surged in South Korea, where they increased by 81%, and in Mainland China, where they increased by more than 50% year-over-year, despite regional lockdowns affecting operations. action, especially in March, the company said preliminary. results for the 53 weeks ending April 2, 2022.
Burberry also sees an improving trend in EMEIA despite the ongoing headwinds from a drop in tourist arrivals due to COVID-19 related travel restrictions.
The company improved profit with adjusted gross margin, up 60 percentage points to 70.6% CER despite pressure from Brexit tax and supply chain inflation. Adjusted operating profit was ahead of guidance, up 38% by CER rate year-on-year to £523 million at the reported rate. Fiscal Year 22 also saw a significant improvement in operating leverage with adjusted operating margins increasing to 19% CER (18.5% reported).
During the year, the company invested in the key categories of outerwear and leather goods. Sales of full-priced outerwear in year 22 increased 39% compared to LLY. Leather goods also delivered strong performance, with full-price sales in fiscal year 22 up 28% compared to LLY with the fourth quarter benefiting from Frances tote, a recent extension to Frances tote. TB family as part of its Summer 22 collection.
In total, the company now has 47 stores with the new design, including the flagship store in Paris on Rue Saint Honoré. It has 65 stores planned for fiscal year 23, meaning that by the end of the fiscal year, about a quarter of the stores it operates directly will carry the new design.
Burberry also announced that it is now carbon-free in its own operations globally; all electricity it uses is from renewable sources; and almost all of its products have a positive attribute, that is, they carry a social or environmental benefit. The company aims to be Climate Positive by 2040, not only by becoming net zero 10 years ahead of the 1.5-degree roadmap outlined in the Paris Agreement, but also by further reducing emissions in its expanding supply chain.
The company maintains its direction of high single-digit revenue growth and accumulates meaningful margins at CER over the medium term. While the current macroeconomic environment creates some short-term uncertainty, Burberry is actively managing inflationary trends. Based on spot rates as of 6 May 2022, the company is expected to post monetary gains of £159 million on sales and £92 million on adjusted operating profit for the financial year. main 23.
Fiber2 Fashion News Desk (KD)