by Stephen Garner
Burberry’s F/W ’16 collection

Global luxury brand Burberry delivered underlying retail sales growth of 1 percent in the third quarter ending December 31. Comparable sales were unchanged year-on-year, an improvement from negative 4 percent in the second quarter, but below internal expectations.

Sales in the October to December period were 603 million pounds (approximately $917 million) due to continuted growth in Mainland China and South Korea.

“In a tougher environment than expected, our sustained focus on growth and cost control drove a number of positive results over the quarter, including the outperformance of digital and a return to growth in mainland China,” said Burberry CEO and chief creative Christopher Bailey. “While Burberry was impacted by the ongoing challenges facing the luxury sector, headwinds in Hong Kong and Macau masked an otherwise stronger performance in many markets.”

Digital outperformed in all regions during the quarter. Benefiting from the company’s investment in mobile, its fastest growing digital channel, it now represents the majority of traffic to burberry.com. Growth was also supported by the expansion of the single pool of inventory model into the company’s largest digital markets, the United States and the United Kingdom.

In what remains a challenging external environment, Burberry currently expects adjusted profit before tax for fiscal year 2016 to be broadly in line with market forecasts, supported by a further reduction in additional discretionary cost savings.

Adds Bailey: “The outlook for our sector remains uncertain as the consumer and environment evolve. However, we are anticipating and responding to these changes through an intense focus on new growth opportunities and the acceleration of our productivity and efficiency agenda.”