TIDMBRBY
RNS Number : 4639Z
Burberry Group PLC
12 January 2024
12 January 2024
BURBERRY GROUP PLC
TRADING UPDATE
"We are continuing to deliver the transition to our new modern
British luxury creative expression for Burberry which started
appearing in our stores in early Autumn. We are still in the early
stages of executing on this, which has become more challenging
against the backdrop of slowing luxury demand. We experienced a
further deceleration in our key December trading period and we now
expect our full year results to be below our previous guidance. We
remain confident in our strategy to realise Burberry's potential
and we are committed to achieving our GBP4 billion revenue
ambition."
- Jonathan Akeroyd, Chief Executive Officer
RETAIL REVENUE 13 WEEKS ENDED 30 DECEMBER 2023
30 December 31 December % change
Reported
GBP million 2023 2022 FX CER*
------------------------------ ----------- ----------- -------- ----
Retail revenue 706 756 -7% -2%
Comparable store sales* -4% +1%
Contribution from space +2%
------------------------------ ----------- ----------- -------- ----
*See page 2 for definition
Comparable store sales by region
Q3 FY24 vs LY Asia Pacific* EMEIA Americas
Comparable store
sales +3% -5% -15%
-------------- ------ ---------
*Asia Pacific consists of: Mainland China +8%, South Asia
Pacific +2%, Japan +9%, South Korea -10%
OUTLOOK
We remain confident in our strategy to realise Burberry's
potential as the modern British luxury brand, and we are committed
to achieving our GBP4bn revenue ambition.
The slowdown in luxury demand is having an impact on current
trading. In this context, we now expect adjusted operating profit
for the financial year ended 30 March 2024 to be in the range of
GBP410m to GBP460m, below previous guidance.
Based on foreign exchange rates effective as of 29 December
2023, we now expect a currency headwind of c.GBP120m to revenue and
c.GBP60m to adjusted operating profit.
The person responsible for arranging the release of this
announcement on behalf of Burberry Group plc is Gemma Parsons,
Company Secretary.
The financial information contained herein is unaudited.
All metrics and commentary in this presentation are at reported
FX and exclude adjusting items unless stated otherwise.
Constant exchange rates (CER) removes the effect of changes in
exchange rates. The constant exchange rate incorporates both the
impact of the movement in exchange rates on the translation of
overseas subsidiaries' results and on foreign currency procurement
and sales through the Group's UK supply chain.
Comparable sales are the year-on-year change in sales from
stores trading over equivalent time periods and measured at
constant foreign exchange rates. It also includes online sales.
This measure is used to strip out the impact of permanent store
openings and closings, or those closures relating to
refurbishments, allowing a comparison of equivalent store
performance against the prior period. The measurement of comparable
sales has not excluded stores temporarily closed as a result of the
COVID-19 outbreak.
Certain financial data within this announcement have been
rounded. Growth rates and ratios are calculated on unrounded
numbers.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
This trading update constitutes our quarterly trading update
which was originally scheduled for 19 January 2024.
ENQUIRIES
Investors and analysts 020 3367 3524
Julian Easthope VP, Investor Relations julian.easthope@burberry.com
Media 020 3367 3764
Andrew Roberts SVP, Corporate Relations andrew.roberts@burberry.com
and Engagement
----------------- -------------------------- -----------------------------
Burberry will issue its Preliminary results for the 52 weeks
ending 30 March on 15 May 2024.
Certain statements made in this announcement are forward-looking
statements. Such statements are based on current expectations and
are subject to a number of risks and uncertainties that could cause
actual results to differ materially from any expected future
results in forward-looking statements. Burberry Group plc
undertakes no obligation to update these forward-looking statements
and will not publicly release any revisions it may make to these
forward-looking statements that may result from events or
circumstances arising after the date of this document. Nothing in
this announcement should be construed as a profit forecast. All
persons, wherever located, should consult any additional
disclosures that Burberry Group plc may make in any regulatory
announcements or documents which it publishes. All persons,
wherever located, should take note of these disclosures. This
announcement does not constitute an invitation to underwrite,
subscribe for or otherwise acquire or dispose of any Burberry Group
plc shares, in the UK, or in the US, or under the US Securities Act
1933 or in any other jurisdiction.
Notes to editors
-- Burberry is a British luxury brand, headquartered in London
-- Burberry is listed on the London Stock Exchange (BRBY.L) and
is a constituent of the FTSE 100 index. ADR symbol OTC:BURBY.
BURBERRY, the Equestrian Knight Device, the Burberry Check, and the
Thomas Burberry Monogram and Print are trademarks belonging to
Burberry.
-- At 30 December 2023, globally Burberry had 225 retail stores,
139 concessions, 57 outlets and 32 franchise stores, excluding
pop-up stores.
APPENDIX
Based on effective FX rates as of 29 December 2023, in FY24 we
now expect a c.GBP120m headwind from exchange rate movements on
revenue and a c.GBP60m headwind on adjusted operating profit. This
compares to guidance given in November for a currency headwind of
c.GBP110m to revenue and c.GBP60m to adjusted operating profit.
Exchange rates Forecast effective average rates for FY24 Actual average exchange rates
-----------------
GBP1= 29 December 2023 25 October 2023 H1 FY24 H1 FY23 FY23
---------------------- ------------------- ----------- ----------- -------
Euro 1.16 1.15 1.16 1.17 1.16
US Dollar 1.26 1.23 1.26 1.21 1.20
Chinese Renminbi 8.99 8.91 8.97 8.16 8.27
Hong Kong Dollar 9.84 9.65 9.86 9.50 9.43
Korean Won 1,646 1,694 1,654 1,579 1,577
---------------------- ------------------- ----------- ----------- -------
Detailed guidance for FY24
Item Financial impact
Impact of retail Space is expected to be broadly stable in FY24.
space on revenues
----------------------------------------------------------
Wholesale revenue Wholesale revenue is expected to decline by a high-single
digit percentage in FY24.
----------------------------------------------------------
Tax We expect the adjusted effective tax rate to be
around 29%.
----------------------------------------------------------
Currency Based on 29 December effective foreign exchange
rates, the impact of year-on-year exchange rate
movements is expected to be a c.GBP120m headwind
on revenue and c.GBP60m headwind on adjusted operating
profit.
----------------------------------------------------------
Capex Capex is expected to be around GBP200m including
over 50% of the store network updated by end of
the year.
----------------------------------------------------------
Share buyback GBP400m share buyback completed on 31 October 2023.
----------------------------------------------------------
Note: Guidance based on CER at FY23 rates
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END
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