10 Finance Monthly. The Monthly Round-Up BURBERRY GROWTH ACCELERATES IN THE FOURTH QUARTER Burberry, the British luxury fashion house, has released its full year results: • Like-for-like sales in store increased 7% for the year, with growth accelerating to 16% in Q4 as sales in Mainland China recovered. • Adjusted operating profit rose by 21%, boosted by currency movements. Excluding currency moves, profit rose by 8%. • Near and medium-term targets unchanged - targeting high-single digit revenue growth and rising margins. Charlie Huggins, Manager of the Quality Shares Portfolio at Wealth Club, commented: “Burberry’s sales growth accelerated in the fourth quarter, as pandemic restrictions in China eased, leading to a solid set of full year results. Looking to the medium to longer term, Burberry’s success will hinge on the success of new chief executive, Jonathan Akeroyd’s strategy to turn around the struggling luxury fashion house. This will take some time to judge, but the early signs are encouraging, with a good response to Burberry’s new brand designs and margins finally moving in the right direction. The group’s performance has been disappointing for many years. Growth and margins have significantly lagged that of European rivals, and operational execution has often left a lot to be desired. Given this track record, it is far too early for the new CEO to declare victory and much work still remains to be done. Sales in the Americas for example declined by 7% in the fourth quarter, a much weaker performance than Burberry’s key European rivals. It’s not going to be a quick or easy fix. Elevating a luxury brand like Burberry and creating new products that resonate with consumers takes time, and there are no silver bullets. But at least sales and margins are moving in the right direction, providing early encouragement.”
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