Burberry's new chief executive Christopher Bailey, who is facing questions over his lucrative pay package, received a boost today as the luxury goods brand beat estimates to report strong sales growth of 12 per cent for the three months to June.
Retail revenue rose nine per cent to £370m for its fiscal quarter to June, up 17 per cent, on the back of digital marketing initiatives that drove sales in apparel and accessories. Analysts had predicted a revenue of £354m. Comparable sales in the Asia Pacific area showed double digit growth, despite ongoing concerns of a luxury slowdown in the region.
“We remain confident of delivering sustainable, profitable growth into the future,” Christopher Bailey, Burberry creative head and chief executive officer, said in the statement.
Bailey took over as chief executive from Angela Ahrendts in May, and has a £1.1m salary, boosted with pension top-ups of around one third of his salary. The luxury retailer is expected to face shareholder opposition at tomorrow's annual general meeting over a pay deal that includes a shares package worth in the region of £20m.
The iconic fashion company, which owns 216 retail stores, 224 concessions, 55 outlets and 69 franchise stores, dedicated resources to initiatives such as click-and-collect, allowing consumers to shop online for items like its famous trenchcoats and picking them up in stores, helping it to outperform its rivals.
In the statement announcing the results, Burberry expressed concern over the strength of the sterling, warning that "if exchange rates remain at current levels", this could have a "material impact on profits" in the coming year.
The firm said that effective exchange rates would now reduce reported profit by about £55 million and adjusted operating margin to around 16 per cent from 17.5 per cent.
Burberry shares opened 5.4 per cent up on the strong rise in revenues.