Burberry Group PLC (LSE:BRBY) missed market expectations in the third quarter as China’s lockdown weighed on performance.
Comparable store sales in the three months to 31 December 2022 were up 1%, although excluding Mainland China, considered a key market for luxury goods, sales were up 11%.
This still fell slightly of short market consensus forecasts for sales growth of 1.4%.
It was a similar story for revenue, which grew 5% to £756mln, compared to City forecasts of £777mln.
"Overall, we are pleased with our performance in the third quarter as double-digit revenue growth outside of Mainland China offset the impact of COVID-19-related disruption there,” said chief executive Jonathan Akeroyd.
“The reopening of China in 2023 should bode well for Burberry going forward and allow it to deliver faster growth," commented Joshua Warner, a market analyst at City Index. "Comparable sales growth is forecast to accelerate to over 7.3% in the first three months of 2023 while retail sales are expected to jump over 9%.”
Looking forward, the high-end fashion brand said its near and medium-term targets remain unchanged at high single-digit revenue growth.
Burberry expects to receive a currency tailwind of roughly £160mln on revenue and £70mln on adjusted operating profit in FY2023.
The company said £363mln of the £400mln share buyback was completed by the end of the quarter.