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Burberry struts forth in China

Burberry has upgraded full-year sales guidance, but unrest in Hong Kong and the coronavirus outbreak represent challenges
January 22, 2020

Burberry (BRBY) has told investors to expect low single-digit full-year sales growth, at constant currencies, as opposed to earlier talk of stable sales. 

2,219p

The upgrade reflects a strong performance in mainland China where the luxury fashion group has seen mid-teens growth rates. Trading has been helped by the introduction of collections from its new design chief Riccardo Tisci, which now accounts for 75 per cent of product in stores. Marketing campaigns around the Lunar New Year and Christmas have also proved a hit with the company’s well-heeled customers. 

Progress has been made despite political unrest and protest in Hong Kong, which has caused Burberry’s sales to halve in the region. Operating margins have also held up despite this ongoing situation, which has been helped by cost savings £5m ahead of target at £125m.