Burberry FY 3Q16 Trading Update Notes

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Carol Fairweather

A tougher external environment for luxury than we were expecting

“In a tougher external environment for luxury than we were expecting, retail revenue for the third quarter was up 1% underlying. Comparable sales were unchanged year-on-year, an improvement from Q2 but below our internal functions considering Hong Kong and the United States. The trading pattern throughout the quarter was uneven with a very late Christmas.”

Mainland China returned to growth but Hong Kong and Macao down by over 20%

“Mainland China and Korea both returned to growth and our relatively small business in Japan once again posted exceptional growth. Hong Kong and Macao again still comparable sales decline by over 20% with the continuation of very weak foothold for us and to the sector.”

I think the events in Paris affected the traveling luxury consumer globally

“I think when we spoke to you in November that was — we said that the world remained very uncertain out there. But what happened subsequently was clearly the events in Paris which I think affected consumer sentiment and the traveling luxury consumer globally.”

The US was another area where we were impacted

“We talked about the U.S. being very uneven and that persisted throughout the quarter and we’ll report in terms of what we’re seeing in terms of U.S. wholesale accounts. So the U.S. was another area where perhaps we were impacted…The U.S. remained uneven possibly impacted by unseasonably warm weather and consumer sentiment”

We’re pleased with the return to growth in China

“”in terms of China we’re pleased that returned to growth. There is an improvement both in footfall and conversion and I think it’s really down just to all the initiatives that we’ve had in place over festive in terms of soft tracking, using our customer insight best in that market. I don’t think we’re brave enough to say it’s necessarily on an improving trend, but we’re certainly pleased with the end to the third quarter performance. And clearly as we look into the fourth quarter it’s all eyes down for Lunar New Year where we’ve got lots of exciting initiatives as well.”