Burberry Group PLC has released its interim results for the 26 weeks ended 30 September 2023. The company reported a revenue of £1.4 billion, a 4% increase compared to the same period last year. Retail comparable store sales also increased by 10%. However, adjusted operating profit decreased by 6% to £223 million, and adjusted operating profit margin decreased by 180 basis points to 15.9%. Adjusted diluted EPS also decreased by 5% to 42.1 pence.
In terms of sales performance, Q2 comparable store sales increased by 1%, with EMEIA (Europe, Middle East, India, and Africa) up 10%, Asia Pacific up 2%, and Americas down 10%. The company saw good performance in its core outerwear and leather goods categories, with outerwear comparable store sales up 21% in H1 and 10% in Q2, and leather goods comparable store sales up 8% in H1 and 3% in Q2.
Burberry also made progress in executing its strategic goals, including the launch of its Winter 23 collection designed by Daniel Lee. The company achieved a more coherent brand aesthetic with campaigns generating improved brand clarity. It also invested in distribution, opening or refurbishing 33 stores in the half and refreshing its website. Burberry achieved efficiency improvements across the value chain and strengthened its supply chain with the completion of an outerwear acquisition in Italy.
The company completed a £400 million share buyback at the end of October, with £200 million completed in H1. It also declared an interim dividend of 18.3 pence, an 11% increase based on 30% of the FY23 full-year dividend.
However, Burberry noted that the slowdown in luxury demand globally is impacting current trading. If the weaker demand continues, the company is unlikely to achieve its previously stated revenue guidance for FY24. Adjusted operating profit would be towards the lower end of the current consensus range (£552m-£668m). The company also revised its currency headwind expectations, now expecting a reduced headwind of approximately £110 million to revenue and £60 million to adjusted operating profit.
Burberry remains confident in its strategy and committed to achieving its medium and long-term targets. The company will issue its Third Quarter Trading Update on 19 January 2024.