Burberry shares jump after 31% drop
Shares in Burb err y jumped yesterday morning as investors were pleasantly surprised on finding out that revenue only dropped by 31 per cent in the last six-month period.
T h e c o m p a ny c a m e o f f a tough op ening to the financial year, to beat expectations, as China and Korea bounced back, helping to boost the luxury fashion retailer.
W h i l e t h e U S h a s a l s o n o t c h e d u p d o u b l e - d i g i t growth, its markets in Europe, the Middle East, India, Africa, Japan and South Asia Pacific are all still being impacted by a fall in tourism. Revenue fell 31 per cent to £878 million in the six months to the end of September, ahead of expectations that it might drop as low as £849 million. Pre-tax profit fell 62 per cent to £73 million.
Interactive investor head of markets Richard Hunter said that Burberry still has a chequered outlook as the pandemic continues, but that it has made progress recently.
"A vastly improved second quar ter improved the over - all half-year numbers, where s t o r e s a l e s a n d r e v e n u e s exc e e d e d ex p e c t a t i o n s , b u t this was not enough to repair the damage which had already been caused," he said.
Analysts had expected comparable store sales to drop 29 per cent, but they fared a little better, down only 25 per cent. Comparable sales returned to growth last month.
"While this is a positive development, it does not incorporate the effects of the second wave lockdowns. The impact may n o t p r ove a s s e ve r e a s the full lockdowns did earlier in the year, but will nonetheless somewhat derail Burb - err y's recover y," Mr Hunter said. Around 10 per cent of the firm's shops are closed at the moment.