Written by: Laura Hoy | Hargreaves Lansdown
Full year underlying revenue rose 23% to £2.8bn, which was 10% ahead of pre-pandemic levels. This reflected a favourable mix of products sold, and a double-digit rise in comparable store sales, which were up 6% versus 2020. Underlying operating profits rose 38% to £523m, ahead of expectations, as full priced sales rose 24% year over year.
Burberry announced a final dividend of 35.4p, taking the full year up 11% to 47.0p. The group’s also planning a £400m share buyback scheme, due to complete in 2023.
The group expects to perform in line with targets for the medium term, but noted that the impact of Covid on consumer spending in China could create some near-term uncertainty.
Shares were broadly flat following the announcement
Burberry’s first set of results under new CEO Jonathan Akeroyd painted a promising picture of the luxury retailer. The group managed both top and bottom line beats despite ongoing covid restrictions that have kept tourist spend at bay. Brand strength was a real highlight with full price sales on the up, particularly given that’s been a key pillar of the group’s transformation strategy.
But the market was reluctant to cheer Burberry’s results, instead focusing on the note of caution in management’s guidance. While medium term targets remain, the group noted that the current backdrop could create some uncertainty ahead. This reflects uncertainty regarding Covid regulations, which suppressed tourist spending over the past year.
Inflation played a relatively minimal role in the cautious outlook, a welcome relief in the retail sector. That’s because the millionaires buying high-ticket handbags and aren’t as worried about rising food and fuel prices, so the brand is relatively insulated in that respect.