Shares of luxury fashion brand Burberry (LON: BRBY) dipped in the early part of Thursday's session before recovering their losses in the aftermath of the release of its interim results for the 26 weeks ended October 1.
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Burberry reported revenue rose to £1.35 billion, up 11% or 5% at constant exchange rates, while its adjusted operating profit came in at £238 million, increasing 21%, or 6% at constant exchange rates. In addition, retail comparable store sales grew 5% year-over-year, with wholesale up 1%.
Burberry declared an interim dividend per share of 16.5p, up from the 11.6p in H1 FY2022.
Meanwhile, the company said new product launches and seasonal collections performed strongly during the period. Its leather goods sales saw good momentum, with comparable sales rising 15% in Q2 and 11% overall in H1, primarily driven by handbags, with the Lola becoming its new best seller, while it was also boosted by the “introduction of the Frances shape for AW22.”
Outerwear comparable sales increased by 3% in H1, although Burberry acknowledged its growth was impacted by lockdowns in Mainland China.
Burberry maintained its near-term guidance to FY24. However, it noted the challenging macroeconomic climate and its potential impact on trading, specifying Covid-related disruptions in Mainland China and recessionary risks in Europe and the Americas.
The high-end fashion brand has set a new medium-term target to grow sales to £4 billion at constant currency while maintaining “high-single-digit growth with operating leverage ensuring good margin progression.”
“Burberry has an extraordinary legacy, a unique British heritage and a very strong platform to build on, as shown in our half-year results. Our focus in this next phase is on growth and acceleration,” said Jonathan Akeroyd, Chief Executive Officer of Burberry.
“I am confident in our ability to deliver our medium-term targets and realise our potential as the modern British luxury brand. I am excited about what we can achieve in pursuit of our long-term ambition to reach £5bn in revenue.”