(News Bulletin 247) – The British company saw its sales increase by 16% on a comparable store basis in the quarter ended April 1, but its revenues fell by 7% in the North America region alone, which the market sanctions.

Unlike our French champions such as LVMH and Hermès, but also the Swiss Richemont, Burberry is hardly impressing the market in this earnings season. The British luxury group has unveiled its accounts for the entire 2022-2023 financial year ended on April 1, as well as its fourth quarter activity.

From early January to April 1, the company posted like-for-like store growth of 16% year-on-year, slightly above the 14% consensus of analysts cited by UBS.

But to give an order of comparison, Hermès saw, in the first quarter of 2023, its sales jump by 23% on a like-for-like basis and LVMH by 17% with an increase of 18% in the “fashion and leather goods” division alone.

>> Access our exclusive graphic analyses, and enter into the confidence of the Trading Portfolio

Slight growth

“After the strong increases recorded by all the competitors who published their accounts during the results season”, the group’s growth appears a “bit slight”, points out UBS.

Above all, Burberry is showing signs of weakness in the North America region, which includes the United States, the largest luxury market. In this geographical area, Burberry saw its revenues fall by 7% like-for-like in the last quarter of its financial year. For UBS, this drop is likely to be interpreted “as confirmation that the most aspirational brands are under more pressure” in a context of “slowdown in consumption in the United States”.

Quoted by Reuters, Jonathan Akeroyd, the general manager, acknowledged that difficulties currently existed, citing a decline in demand for entry-level products, such as sneakers, hats and belts.

“We think there will be a recovery in the second half,” he said, however.

Over its entire 2022-2023 financial year, Burberry saw its revenues increase by 7% at the number of comparable stores to 3.1 billion pounds. Operating profit increased from 543 million pounds to 657 million pounds, while the corresponding margin rose to 21.2% against 19.2% over the previous year. Net earnings per diluted share rose 29% to 126.3 pence.

These results follow the presentation of new creative director Daniel Lee’s debut collection during London Fashion Week in February.

On the London Stock Exchange, Burberry shares are under pressure, falling 6.8%. The title is nevertheless up nearly 16% since the start of the year.