Burberry sees 35% operating profit surge as sales accelerate

Bloomberg

Burberry Group Plc said sales accelerated and operating profit will probably surge about 35% this year as the British maker of trench coats and other luxury fashions sells more products at full prices.
The company issued the earnings forecast as it reported better-than-expected revenue for the last three months of the year. Comparable store sales grew 7% in the period, the London-based company said in a statement Wednesday. Analysts surveyed by Bloomberg were expecting a 5.1% gain. Sales for the quarter have yet to surpass the same period in 2019.
“We continued to attract new, younger consumers to the brand,” said Chairman Gerry Murphy. The stock surged as much as 5% in London, its biggest gain in 10 months. Burberry is undergoing a transition period with incoming Chief Executive Officer Jonathan Akeroyd set to take the helm on April 1.
Akeroyd’s predecessor sought to elevate Burberry to make it more premium by reducing third-party distribution as well as discounts in order to sell its Olympia handbags and tartan scarves at full prices. Those sales continued to grow at a double-digit percentage from two years ago, according to Murphy.
On Tuesday, Prada SpA unveiled annual revenue which outperformed analysts’ estimates while Cartier owner Richemont reported Wednesday the fastest holiday-season sales growth in at least a decade.
Burberry shares trailed behind those of Louis Vuitton owner LVMH in 2021, highlighting the luxury industry’s uneven recovery from pandemic restrictions.
Burberry said comparable stores sales in the Asia-Pacific region were flat during the period compared with two years ago.