Mulberry First-Half Sales Rise 18% as It Says It Resisted Discounting

Mulberry (LON: MUL), the British luxury handbag and lifestyle brand, said first-half sales rose 18.1% in the 26 weeks to the 26th of September. The update said the performance was in line with the board’s expectations.

The AIM-listed shares closed on Friday at 230p, up 0.44%. That is about 2.4 times the roughly 95p weekly close of a year earlier, but below the 280p weekly close of early September.

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Growth was 18.2% at constant currency, meaning with exchange-rate effects stripped out. The US rose 28%, Europe excluding the UK 23% and the UK 10%, while franchise and wholesale, sales through partners’ stores, jumped 52%. Asia Pacific rose 5%.

Wholesale made up 17% of total sales, against 16% in the first half of last year. The US benefited from the launch of Bloomingdale’s Marketplace and a wider wholesale presence, the company said.

Mulberry says it resisted discounting. Excluding markdown activity, promotional sales were a 300 basis point lower share of sales than a year earlier, which the company says supported gross margin.

The company gave no profit, margin or revenue figures, and says it is still rebuilding gross margin and restoring profitability. Chief Executive Officer Andrea Baldo struck a measured note on the outlook.

There remains much more to achieve as part of our strategic plan, and we are operating in a challenging trading environment.

Andrea Baldo, Chief Executive Officer, Mulberry

Medium-term targets are annual revenue above £200m and a 15% adjusted EBIT margin, operating profit as a share of sales before one-off items. Half-year results are due on the 19th of November and will show whether sales growth is reaching profit.