LONDON – Burberry is back in growth mode, with same store sales surging 32 percent in the fourth quarter of fiscal 2021, following a 9 percent decline in the previous period due to lockdown-related closures, and a clampdown on seasonal discounting.
That fourth-quarter bounce helped to lift Burberry’s full-year performance, with the company posting an 11 percent decline in revenue to 2.34 billion pounds, with same store sales down 9 percent for the 12-month period that was scarred by store closures worldwide, reduced tourism and uncertainty across all of Burberry’s major markets.
Reported operating profit more than doubled to 521 million pounds in the 12 months ending March 27, including one-off adjusting items of 125 million pounds.
Excluding adjusting items, operating profit was 396 million, reflecting tight cost control and strong performance in full-price sales. Profit after-tax more than tripled to 376 million pounds.
Burberry has reinstated its dividend to 2019 levels, paying 42.5 pence, compared with 11.3 pence last year, and plans to re-introduce a mid-year dividend in November.
The shares closed down 4.2 percent at 20.16 pounds in a lackluster day for the FTSE 100.
Burberry’s chief executive officer Marco Gobbetti said Burberry is now in a position to build on that growth, and stake its claim as a luxury player.
“In the last three years we have transformed our business and built a new Burberry, anchored firmly in luxury,” said Gobbetti.
“We have revitalized our brand image, renewed our product offer and elevated our customer experience while making further progress on our ambitious social and environmental agenda. In spite of COVID-19, we achieved our objectives for the period and delivered a strong set of results in full-year 2021, ending the year with good full-price sales growth.”
He said that, looking ahead, and “supported by these foundations and the strength of our teams,” the plan is to accelerate growth and deliver value creation “while continuing to build a more inclusive and sustainable future.”
The company said that recovery accelerated through the year with fourth-quarter comparable store sales down 5 percent compared with the corresponding period in 2019, a year before the pandemic struck the U.K., and despite an average 16 percent of stores being closed in the three month period.
The company said that full-price sales grew 63 percent in the fourth quarter – nearly double the rate of same store sales growth in the same period – and 12 percent versus Q4 2019, driven by Mainland China, Korea and the U.S.
The company said that 2021 overall growth was driven by “excellent response to product, with growth in our strategic categories and in selling prices, increasing brand strength attracting new and younger customers, and local customer traction, thanks to innovative selling formats during lockdowns.”
Looking ahead to fiscal 2022, Burberry said it expects revenue to grow by “a high single digit percentage” underpinned by the continued outperformance of full-price sales.
“We will continue to strengthen brand equity by exiting markdowns in mainline stores” in fiscal 2022,” the company said, adding that it is focused on, and continues to invest in, sustainability and social goals.
It will become carbon neutral by 2022, and plans to continue championing diversity and inclusion, impacting one million people in the communities in which it operates.