Luxury fashion brand Burberry has surprised investors with a positive trading update, announcing a strong rebound in sales since December. The company expects its revenue and adjusted operating profit to exceed market expectations, a significant turnaround considering the impact of the COVID-19 pandemic on the industry.
Burberry predicts that comparable store retail sales in Q4 will be between 28% and 32% higher year-on-year. However, it’s important to note that these figures are not compared to a “normal” period for the company. Last year, the same period was greatly affected by lockdowns in China and Europe, and this year’s numbers also take into account store closures due to renewed lockdowns.
Despite these challenges, Burberry has managed to achieve sales growth and expects a decline of only 10% to 11% in group revenue for the full year. The adjusted operating margin is projected to be in the range of 15.5% to 16.5%. This positive outlook not only benefits Burberry, but also indicates potential recovery for the wider luxury sector.
However, the company’s recovery is still dependent on the revival of tourist shopping, which remains uncertain in the near future. Burberry will provide a more comprehensive overview of its performance when it releases its preliminary results on May 13.
This unexpected news from Burberry serves as a reminder that well-managed businesses can bounce back from crisis periods, despite the challenges faced by the industry. The luxury fashion sector will be closely watching Burberry’s performance as an indicator of the industry’s potential recovery from the ongoing pandemic.
**Useful links**:
1. Burberry Official Website
2. CNBC Article on Burberry’s Sales Recovery
