Burberry has reported a significant increase in profit guidance as its full-price sales continue to soar, signaling a strong recovery for both the brand and the luxury sector as a whole. During the company’s fiscal Q3, full-price sales grew in double digits compared to two years ago, with Chairman Gerry Murphy attributing this growth to a “higher-quality business” and the strong performance of their focus categories: outerwear and leather goods. These categories have successfully appealed to new and younger consumers, driving the brand’s success.

While overall comparable store sales remained flat compared to Q2 and were down 3% compared to two years ago, this reduction in markdowns was part of Burberry’s strategy to improve revenue quality. The company’s retail revenue for the quarter reached £723 million, and it achieved its highest level of earned reach on Instagram, driven by brand activations such as its pop-up on Jeju Island and its strong presence on TikTok. These activations have bolstered the brand’s appeal among new and youthful consumers, contributing to the growth in full-price sales.

Burberry has also experienced a surge in full-price sales through its digital channels, with a high double-digit percentage increase compared to two years ago. Based on current conditions, the company expects its adjusted operating profit for the current year to grow by around 35% at constant exchange rates, exceeding analysts’ expectations. It also maintains its medium-term guidance for high-single-digit top-line growth and meaningful margin improvement.

Regionally, full-price comparable store sales were driven by strong performance in the Americas, a notable improvement in Asia Pacific as Covid-19 restrictions eased, and positive trends in EMEIA despite the ongoing lack of tourism. Outerwear sales saw a significant increase of 38% compared to two years ago, supported by a major campaign and the introduction of the new elevated check range in Birch Brown colorway. Leather goods also experienced a 29% increase in full-price sales compared to two years ago, thanks to the expansion of the Lola family with new crossbody, tote, and SLG versions.

Burberry is dedicated to enhancing the customer experience through its new store concept, with 31 stores already designed in this new format, including its second flagship store in Shanghai. The company plans to open around 50 more concept stores by the end of the financial year. The new store concept aims to revolutionize how customers interact with the brand and its products, ultimately driving revenue growth. In addition to physical stores, Burberry is focusing on digital channels, witnessing strong and increasing customer engagement online due to improvements made to the online purchase journey, including enhanced personalization. Overall, Burberry’s impressive performance in full-price sales and its strategic efforts to attract new and younger consumers demonstrate its ongoing recovery and growth in the luxury sector.

Links:
1. Burberry Official Website
2. Burberry Instagram Profile