Burberry made its preliminary earnings for the fiscal year available, after it closed on March 27th, 2021. Result: a 10% decrease in sales and a revenue of 2.34 billion pounds. The (main) causes behind the decrease were the closed stores and the reduced tourists’ flux. The consequence was a loss on the price-per-share, also given that analysts expect the luxury brand to be further hit by operational expenses and required investments during the next fiscal year.
2.34 billion pounds
Marco Gobbetti, CEO of Burberry, commented the results by stating that, during the course of the fiscal year, the company reached its objectives and gave good results, supported by full-price sales, up 63% in the last quarter thanks to China, Korea and the USA. Julie Brown, Chief Operating and Chief Financial Officer of the brand, stated particular satisfaction for the performance in China, reports Reuters. Yet, he didn’t disclose how large the impact of the “Uiguri scandal” in the Xinjiang region was for the brand.
Leather goods under the spotlight
Leather goods remained the focus and obtained “medium growth”. The brand cites great performance of the leather models Pocket and Olympia, on which Burberry claimed to be aimed for the future. Online sales also recorded “a particularly strong performance in the accessories’ category, pushed by leather goods and by footwear”, reads the brand’s note.
“Our ambition in the medium term is that obtaining strong revenue growth compared to the 19/20 fiscal year”, says Mr. Gobbetti. And that it plans on obtaining it “with an overperformance of full-price sales and a significant increase of operational margin”. But there is a shadow on Burberry’s operational margins in 2021/2022: they will be negatively impacted by additional operational expenses and more investments necessary to drive growth. The statement, according to analysts, generated much concern on financial marketplaces, causing Burberry’s shares to slide.
Images from burberry.com
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