Burberry, sales down but less than analysts' estimates
In the quarter ending June, comparable sales in shops fell by 1 per cent, better than the 3.7 per cent decline predicted by analysts.
by Mo.D.
3' min read
Key points
3' min read
First signs of turnaround for Burberry. The British brand's sales fell less than expected in the first quarter of the current fiscal year, signalling the first results of the turnaround plan led by CEO Joshua Schulman.
In the quarter ending June, comparable sales in shops fell by 1 per cent, better than the 3.7 per cent decline predicted by analysts. In the same period last year, sales were down 21%. The best performance was recorded in the US market, where sales grew by 4% compared to the 0.8% expected, mainly due to the acquisition of new customers.
On the London Stock Exchange, after an initial flare-up of 5.8 per cent, the stock was trading in positive territory by more than 3 per cent in mid-morning. The balance since the beginning of the year is positive by more than 30%.
The Relaunch Plan
.Despite the results, Burberry was keen to point out that the relaunch plan is still in the early stages and that the macroeconomic environment remains uncertain. Schulman, who has been at the helm of the group for a year, is aiming to return Burberry to its British roots by strengthening its positioning in the outerwear segment, particularly trench coats and scarves, and reducing its dependence on lines such as high-end leather goods, a strategy that has not been successful with customers. In May, Schulman announced a 20 per cent cut in its workforce as part of its cost-cutting plan, impacting mainly UK locations and global retail roles.
Among the initiatives to strengthen the connection with local markets, Burberry appointed four regional chairmen to the executive committee, while eliminating the vacant position of Chief Commercial Officer.
