- Luxury fashion retail company Burberry’s shares dropped sharply after the company reported in its interim results that sales growth slowed down due to continuing impact of the pandemic.
- The group’s H1 2022 comparable store sales growth rose marginally by 1 per cent on a like-for-like basis.
Luxury fashion brand Burberry Group PLC’s (LON: BRBY) shares fell over 6 per cent on Thursday, after the company, in its latest interim results, said that sales growth slowed down due to continuing impact of the pandemic.
Burberry Group PLC’s (LON: BRBY) share price performance
Burberry’s shares were trading at GBX 1,843.50, down by 6.28 per cent on 11 November at 12:02 PM BST. The stock was amongst the highest fallers on the FTSE 100 index, while the FTSE 100 index was at 7,367.57, up by 0.37 per cent.
Comparatively, the personal goods sectoral index, which Burberry is a part of, was at 34,766.36, down by 2.88 per cent.
(Image source: Refinitiv)
The company’s market cap stood at £7,965.52 million on Thursday, and its one-year return was at 14.80 per cent, while its year-to-date return was at 3.35 per cent as of 11 November.
Burberry’s H1 2022 interim results
The company reported its interim results today, for the 26 weeks period ended on 25 September.
The fashion group reported its revenue for the period rose by 45 per cent, on a constant exchange rate (CER) basis, to £1,213 million, up from £878 million as of 26 September 2020.
Its adjusted operating profit for the period rose by 4.2 times on a CER basis and by 3.8 times on a reported exchange rate basis to £196 million, up from £51 million in the same period last year.
The group’s free cash flow for the period rose to £104 million, reversing from a negative £45 million on 26 September 2020.
Burberry also reported it had resumed its interim dividend, declaring a dividend of 11.6 pence per share, up by 3 per cent from H1 2020.
Comparable sales growth continues to be impacted by covid-19
The group’s H1 2022 comparable store sales growth rose marginally by 1 per cent on a like-for-like basis, compared from the last-to-last year (LLY), which is the equivalent period in FY 2020.
The group’s H1 2022 comparable full-price sales growth rose by 18 per cent on a like-for-like basis from LLY.
The company attributed ongoing covid related restrictions in the Asia Pacific region, including mainland China during Q2 2022, South Asia Pacific and Japan, for the slowing sales growth.
Asia Pacific region’s H1 2022 comparable sales growth rose by 5 per cent on a like for like basis from H1 2020.
Moreover, the store sales growth in Europe, the Middle East, India and Africa region fell by 25 per cent in Q2 2022 and by 31 per cent in H1 2022.
The fall was due to limited tourist flows in the region, as tourists account for about 50 per cent of its annual sales.