The increase was driven by strong sales in Britain, France and China, and the company said it was positive on the year ahead.
The 156-year-old seller of raincoats and leather goods reported total revenues of £1.027 billion sterling for the six months to the end of March.
This was in line with analysts’ average forecasts of £1.03 billion.
The company said retail revenues, which now account for 72% of group sales, rose almost a quarter to £743m and that the outlook was good.
Wholesale and licensing sales rose 7% and 5% in the second half of the year, respectively.
Angela Ahrendts, Chief Executive Officer, commented:
“With underlying revenue up 18% in the second half, we are pleased with Burberry’s finish to the year across all channels, regions and product divisions. Looking ahead, while we remain vigilant about the external environment, our global teams continue to focus on optimising our core brand, digital and cultural initiatives, while investing to drive sustainable, profitable growth.”
Retail
Retail sales, which accounted for 72% of total revenue in the second half, grew by 23% on an underlying basis (up 25% at reported FX).
Comparable store sales in the half increased by 12% (Q3: +13%; Q4: +11%). The UK, France and Greater China remained strong, especially in flagship markets. In mainline, average retail selling price was again the key driver of sales growth, helped by greater penetration of Burberry London in both women’s and men’s apparel. Knitwear, men’s tailoring and accessories grew strongly, as did fragrance and watches.
During the second half, Burberry opened 11 mainline stores and closed six. Openings included an 11,000 square foot store in Taipei, the first flagship in this market, an 8,000 square foot flagship in Paris, a third store in Brazil and a second in Mexico. Average retail selling space for the second half increased by 13%.
Wholesale
Wholesale revenue in the second half increased by 7% at constant and reported FX, compared to guidance of mid single-digit percentage growth. Growth was impacted by the planned shift from wholesale to retail in Saudi Arabia and Spain and further rationalisation of the brand’s distribution in the United States and Europe.
Excluding these actions, there was double-digit percentage growth in Emerging Markets, Asia Travel Retail and US department stores, driven by brand momentum and new dedicated shop-in-shops. Core outerwear and large leather goods performed solidly, helped by replenishment.
Licensing
Total licensing revenue in the second half increased by 5% on an underlying basis (up 10% at reported FX), consistent with full year guidance. Japanese licence income was slightly down in the half, largely reflecting the planned termination of certain non-apparel licences. There was excellent growth from the three global product licences (fragrance, watches and eyewear), led by the new Burberry Body fragrance and current season watch collections.
Discussions continue between Burberry and Interparfums regarding the potential establishment of a new operating model for the Burberry fragrance and beauty business.
Outlook
Retail: In the year to 31 March 2013, Burberry plans a 12-14% increase in average retail selling space, with a shift from smaller to larger stores, especially in flagship markets. Burberry expects to open about a net 15 mainline stores, biased towards Emerging Markets and cities with high tourist inflows.
Wholesale: In the six months to 30 September 2012, Burberry projects underlying wholesale revenue to increase by a mid single-digit percentage. Despite further rationalisation of the brand’s distribution in both Europe and the United States, double-digit percentage growth is again expected in key US department store doors, Emerging Markets and Asia Travel Retail.
Licensing: In the year to 31 March 2013, Burberry expects licensing revenue at constant and reported exchange rates to be broadly unchanged year-on-year. The global product licences are again expected to deliver double-digit percentage growth. This will be offset by the planned termination and downsizing of Japanese non-apparel licences.
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