- Burberry Group’s preliminary fiscal year 2023 earnings showed comparable store sales rose 16% for Q4 despite a 7% decline in the Americas.
- The sales growth in Q4 was aided by a 13% increase in mainland China, Burberry’s biggest market. Excluding China, comparable store sales grew by 17% in Q4, which was the year’s strongest quarter, and comparable store sales for the full fiscal year rose 7%.
- The earnings call was the first since the luxury British brand’s new creative director Daniel Lee debuted his first collection in February. That collection will hit stores this fall.
On the call, CEO Jonathan Akeroyd said he was pleased with the results, particularly with the fourth quarter growth rebound in mainland China, as well as with the company’s new creative direction. “Having appointed Daniel Lee as our new chief creative officer, we have refocused our brand aesthetic and brought his new creative vision to life with a campaign and runway show that have been very well received,” he said.
The company has been working on a brand refresh and has refurbished or opened 60 stores in the last year, with another seven set for completion this spring. According to the earnings report, Burberry now has about 30% of its full-price stores updated, and 40% of those are in Asia, where the company’s sales are especially robust. China makes up about 30% of Burberry’s business.
The company said it plans to update more than 50% of its stores worldwide by the end of fiscal 2024, and it wants to finish the rollout by fiscal 2026.
“We have reorganized our supply chain, merchandising and digital teams under new leaders to drive our strategy forward,” said Akeroyd. “While the external environment remains uncertain, I am confident we can achieve our FY24 and medium-term targets as we focus on executing our plan to realize Burberry’s potential as the modern British luxury brand.”
Those plans are currently hindered by poor sales in the Americas. Burberry's shares dropped 6% after the company reported weak quarterly numbers in the region and a quarterly sales decline of 7% in Q4.
The company pointed to younger customers, who were affecting the lower-priced categories of the brand by staying away from Burberry’s “entry-level items” such as sneakers, hats and belts. "There's a challenge there at the moment," said Akeroyd.
A recent executive team shake-up could help. In January, the company hired Giorgio Belloli as the chief digital, customer and innovation officer and Delphine Sonder as the chief merchandising officer. Then in March, new CFO Kate Ferry came in. And last month, Burberry tapped Klaus Bierbrauer as its new chief supply chain and industrial officer.