Burberry shares surge 15% after strong Q3 results
Burberry reports better-than-expected Q3 performance
Burberry’s third-quarter trading statement revealed stronger-than-expected results, leading to a more than 15% jump in its share price on Friday.
The British luxury fashion brand reported a 4% decline in retail like-for-like sales, which, while negative, surpassed the expected 12% drop. This marked an improvement compared to the 20% decrease in the previous quarter, signalling a recovery in consumer demand, reports Investing.com.
Regional Sales Performance
Sales improved across all regions, with the Americas seeing a 4% increase in sales, much better than the forecasted 8% decline. EMEA (Europe, Middle East, and Africa) sales were down by 2%, outperforming the predicted 5% fall. In APAC (Asia-Pacific), sales contracted by 9%, a marked improvement over the anticipated 19% drop.
Comparable store sales in Mainland China fell by 7%. However, the broader Chinese consumer group, including tourists, performed better, exceeding expectations in domestic sales. This indicates that Burberry’s appeal remains strong among Chinese shoppers despite some domestic challenges.
Recovery and Strategic Focus
The overall global sales performance signals a recovery in consumer demand. The company’s strategy of refocusing on core products and improving store layouts and presentations, alongside markdown activity, has positively impacted performance.
Burberry’s CEO, Jonathan Akeroyd, has emphasized the importance of these strategic changes, and analysts have noted that these early results represent a step in the right direction.
Burberry updated its guidance for the second half of the fiscal year, stating that earnings are expected to recover and offset the £41 million EBIT loss from the first half. RBC Capital Markets analysts highlighted the positive changes and credited Burberry's strategic shift as key drivers behind the improved performance, indicating optimism for the brand's future prospects.
Reminder, Taiwan Semiconductor Manufacturing Corp. (TSMC), the world’s largest chipmaker, has reported a 57% increase in profit for the last quarter, fuelled by the rapid expansion of artificial intelligence (AI) technology.
