LONDON — A 22.4 percent spike in second-half revenue allowed Burberry to breeze past its revenue target for the year ended March 31.
In a statement Tuesday, the firm said that second-half revenues jumped ahead to $502.4 million from $411 million in the last six months of the prior year. This would place full-year sales at $932.1 million, 18.9 percent of last year’s $783.4 million and nearly $40 million past the goal of $894.9 million established internally, although never released by the company, at the time of its initial public offering last summer. Dollar figures have been converted from the pound at current exchange rates.
"As a result of Burberry’s strong trading performance in the second half, the company has more than achieved the 2002-03 revenue objective set at the time of the IPO," chief executive officer Rose Marie Bravo said in a statement.
Burberry plans to report full-year results, including profit figures, on May 22.
The sales performance, which surpassed both outside and inside forecasts, helped drive Burberry shares up 24 cents, or 6.5 percent, to close at $3.85 Tuesday on the London Stock Exchange.
The greatest portion of the increase in revenues in the second half came from Burberry’s retail operations, which registered a 55 percent increase in second-half revenues to $224.5 million from $144.8 million a year ago. Wholesale volume and licensing revenue checked in with increases of 4 percent each, to $229.2 million from $218.7 million and to $48.7 million from $46.6 million, respectively.
Bravo added that the growth was driven by "key product categories, targeted regions and selected distribution channels." Describing the current market climate as "volatile and uncertain," she characterized the firm as confident but prudent.
Sagra Maceira de Rosen, a luxury analyst with J.P. Morgan, said Burberry’s results were better than she expected. She had projected a 10 percent rise in revenue for the second half.
"Burberry is benefiting from great management, a strong accessories business, well-priced merchandise and the repositioning of the brand," she said.
She added that she was expecting full-year earnings before interest and taxes to rise 22 percent to $163.3 million and net profit to rise 23 percent to $119.3 million.The full-year figures exceeded projections issued in a research report Monday by Bear Stearns analyst Dana Telsey, who had expected full-year sales to grow 16.1 percent to about $910 million.
She also noted that, as the first disclosure of full-year sales for Burberry as a public company, "it will likely set the tone for future releases."
Burberry said the opening of seven new stores fueled retail sales growth, and there are plans to open eight stores and two new concessions in the current fiscal year. The only drag on sales during the period occurred in March, the company said, when the war in Iraq and the outbreak of the SARS virus affected performance, particularly in the U.K. and Hong Kong markets.
The company acknowledged that wholesale growth was tempered by the acceleration of deliveries into the first half, compared with the prior year. As for licensing, the growth reflected "modest" volume gains and increases in certain royalty rates in Japan as well as strong sales increases by global product licensees.
For the full year, retail sales were $358.9 million, wholesale sales were $481.8 million and licensing revenue was $91.4 million, for a total of $932.1 million.
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