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Author: Alan LittleDate: 2021-07-19

Burberry (BRBY) -5% despite fiscal Q1 sales rebound

Burberry (BRBY) said that retail revenue rebounded strongly in fiscal Q1, but the luxury fashion house still closed 5% lower in London on Friday.

During the three months to 26th June, Burberry generated £479m revenue as trading picked up following the reopening of stores in the UK and Europe.

That figure was 90% higher than store sales for the same period a year ago when lockdowns were still in place and 1% up on Q1 2019 prior to the pandemic.

While performance rallied, Burberry said that around one in 10 of its stores were closed during Q1, though by the end of the 13 weeks, only 3% were still shut.

The impact of COVID-19 is still keenly felt though as Burberry noted that a notable drop-off in international tourist traffic is negatively affecting business across Europe and Asia.

While many stores have reopened, 35% are trading at reduced hours.

The solid Q1 numbers should alleviate investor fears somewhat though and Burberry is still confident of matching its guidance for the full year.

Another bright spot is the expectation of a 60% rise in wholesale revenues during the first half of the year.

Outgoing chief executive Marco Gobbetti believes that Burberry is now “firmly set on a path of growth and acceleration”.

Gobbetti will leave the FTSE 100 company in December and CFO Julie Brown revealed on Friday that chief designer Riccardo Tisci will remain despite speculation about a departure.

Brown noted that Tisci was “very excited” about his future with the company following a positive response to his latest collection.

Burberry shares traded down on the London Stock Exchange on Friday with the 5.02% retreat by close setting a new 1,966.00p price.

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