Burberry released their preliminary results for 53 weeks on 18th May. According to the report, FY22 marked the start of the brand’s strategy growth and acceleration phase. Burberry has focused on strengthening their distinctive brand equity to create long-term, high-quality growth while maintaining the brand’s competitiveness in the last quarter.
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FY22 revenue increased 10 percent compared to FY20 and 23 percent vs FY21 at CER. Burberry’s plan to eliminate mainline and digital markdowns delivered a major improvement in the quality of their revenue streams, resulting in a 30 percent increase in full-price comparable store sales against LLY. Despite regional lockdowns, notably in March, full-price comparable store sales in South Korea surged by 81 percent and a significant rise of more than 50 percent in Mainland China compared to FY20. Despite a continued headwind from reduced tourists due to COVID-19-related travel restrictions, the brand noticed increasing growth in EMEIA.
Despite challenges from Brexit taxes and supply chain inflation, Burberry’s adjusted gross margin increased by 60 basis points to 70.6 percent at CER. Adjusted operating profit exceeded expectations, rising 38 percent at CER compared to FY21 to £523 million (USD 652.7 million) at reported rates. The operating leverage improved significantly in FY22, with adjusted operating margin growing to 19.0 percent at CER (18.5 percent reported).
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With the launch of the brand’s Autumn/Winter 2022 collection in the fourth quarter, Burberry concluded their first in-person runway show in two years. The presentation featured icons from the Burberry archive, including its signature Equestrian Knight Design, dated back to the brand’s distinct heritage. Show views were up triple digits compared to the Autumn/Winter 2021 presentation, helping to drive considerable growth in Instagram followers and global press coverage. In addition, Burberry also teamed with Supreme in March to introduce an exclusive collection that sold out within seconds on Burberry.com.
Overall, Burberry’s brand initiatives in the quarter created global engagement, with a triple digit increase in the number of Instagram followers year over year. Last but not least, Tik Tok maintained its growing trend in the fourth quarter, surpassing the one million follower mark.