Luxury fashion house Burberry (LSE: BRBY) lifted by more than 5% in early trade this morning, following a decent set of results in a first quarter that saw Christopher Bailey take over as CEO from Angela Ahrendts in May.
Retails revenue grew by 17% on an underlying basis to £370m, an improvement of £31m from Q1 2013. Historically, the first quarter sees the smallest amount of sales in the retail sector, and analysts had only forecast revenue of £354m for Burberry in the three months to 30 June 2014, leading to the stock being the fourth most traded by value at 9am this morning.
Management reaffirmed that key drivers of retail growth remained the same, with online traffic growing, investment within customer service leading to improved conversion both offline and online, while increased targeted marketing saw digital continue to outperform.
Mr Bailey went on to say:
“This first quarter performance reflects our focus on striving to give customers the best possible experience of the Burberry brand through ongoing investment in retail, digital and service, both on and offline. The 12% increase in comparable sales demonstrates our teams’ success in unlocking the benefits of these investments, as we continue to concentrate on the things we can control in an uncertain external environment.
“As we build on this strong start to the year, our priority remains to connect consumers ever closer to Burberry through authentic products and experiences that celebrate our unique heritage. With great brand momentum and a focused vision, we remain confident of delivering sustainable, profitable growth into the future.”
Having more than double-bagged since its low point five years ago (561p, at which it began its ascent to today’s levels) and on a dividend yield of 2.3%, Burberry offers a mix of growth an income for investors keen on exposure to retail both within the UK and around the world, particularly the attractive Chinese emerging market.
