Burberry, the iconic British luxury brand, has reported strong financial performance for the year ending on April 1, 2023. CEO Jonathan Akeroyd attributed this success to notable growth in the leather goods and outerwear categories, particularly in the fourth quarter. Akeroyd also praised the rebound in Mainland China and the successful implementation of a new creative vision by Daniel Lee, the company’s creative chief.

In terms of numbers, Burberry’s annual revenue reached £3.094 billion, representing a 10% increase compared to the previous year. When compared on a direct 52-week basis and at constant exchange rates, revenue was up 5%. The retail channel revenue saw a 10% rise to £2.5 billion, with retail comparable store sales increasing by 7%. Wholesale revenue rose by 6% to £543 million (1% increase at constant exchange rates), and licensing revenue experienced impressive growth of 23% to £50 million.

The fourth quarter ended on a high note, with a 16% growth in store sales on a comparable basis, including a substantial 13% increase in Mainland China. Excluding Mainland China, the overall growth for the company was 17%, with a significant 27% jump in the Europe, Middle East, India, and Africa region, and 19% growth in Asia Pacific. However, the Americas saw a slight decrease of 7%, which the company attributed to Americans shifting their purchases to the EMEIA region due to tourist spending.

By product, outerwear comparable store sales grew by 7% for the year and 30% in the fourth quarter. Leather goods saw a comparable sales increase of 12% for the year and 15% in the fourth quarter, while ready-to-wear sales, excluding outerwear, were in line with the group average for the year. Women’s ready-to-wear experienced double-digit growth, while men’s ready-to-wear saw mid-single-digit growth.

Looking ahead, Burberry remains optimistic and believes it is making progress towards its growth targets. The company received an excellent response to its new brand aesthetic and the first campaign and runway show by Daniel Lee. In addition, Burberry is in the process of updating its store network, with 30% of its full-price stores already renovated. It plans to update over 50% of stores by the end of fiscal year 2024 and complete the rollout of the refreshed portfolio by fiscal year 2026.

With a new CEO and creative chief in place, Burberry has outlined its strategy to become the modern British luxury brand. Its medium-term target is to grow sales to £4 billion at constant exchange rates, with a longer-term ambition to reach £5 billion in revenue. The arrival of Daniel Lee has been seen as a crucial factor in Burberry’s growth strategy, with his debut runway show generating extensive media coverage. The company is particularly excited about the success of its rainwear and leather goods offerings.

Despite the positive results and ongoing transformation, Burberry has not upgraded its existing guidance. The company aims for a “high single-digit revenue compound annual growth rate” from its fiscal year 2020 base and expects a 20% adjusted operating profit margin at constant exchange rates for fiscal year 2024. However, it acknowledges the potential currency headwinds in fiscal year 2024, estimated at around £70 million on revenue and £40 million on adjusted operating profit.

Useful links:
1. [Burberry Official Website](https://www.burberry.com/)
2. [Burberry Investor Relations](https://www.burberryplc.com/investors.html)