Burberry Group PLC Update on the Impact of COVID-19 (7156G)
19 Marzo 2020 - 1:00AM
UK Regulatory
TIDMBRBY
RNS Number : 7156G
Burberry Group PLC
19 March 2020
19 March 2020
Burberry Group plc
Update on the impact of COVID-19
"Since our February update, the material negative effect of
COVID-19 on luxury demand has intensified and is now impacting the
industry in all regions. Our primary concern is the global health
emergency and we continue to take every precaution to help prevent
the spread of the virus and ensure the safety and wellbeing of our
employees, partners and customers. We are implementing mitigating
actions to contain our costs and protect our financial position,
underpinned by our strong balance sheet. We remain confident in our
strategy and the strength of our brand and I am exceptionally proud
of our teams' resilience and commitment." Marco Gobbetti, Chief
Executive Officer
Given the ongoing escalation of the COVID-19 pandemic, we wanted
to update the market on the impact on our business as we approach
the end of FY 2020 (28 March 2020).
Since 24 January 2020, trading has deteriorated significantly
with comparable retail store sales tracking between -40% and -50%
over the last six weeks.
As we set out in our announcement on 7 February 2020, our sales
losses in February were predominantly in our Asian markets. While
trading in Mainland China has started to improve with the reopening
of most of our stores, sales in EMEIA and the Americas have fallen
materially in recent weeks. More than 60% of our stores in EMEIA
and around 85% of our stores in the Americas are currently closed
with those still open operating with reduced hours and with very
weak footfall. In total, around 40% of our directly operated stores
globally are closed with additional closures expected over the
coming days.
Following the significant escalation of governmental trading,
travel and social restrictions in recent days and the inevitable
impact this will have on demand, we are expecting our comparable
retail store sales in the final weeks of the year to be within the
range of -70% to -80%. As a result, we now expect Q4 2020
comparable retail store sales to be around -30%.
We are implementing mitigating actions to contain costs and
protect our financial position, including renegotiating rents,
restricting travel and reducing discretionary spending. Our primary
concern is the global health emergency and we are taking
appropriate measures to help prevent the spread of the virus and
ensure the safety and wellbeing of our employees, partners and
customers, while following government guidelines in all our
markets. These include implementing home working for the majority
of our office-based teams and reducing work patterns and
introducing specific shift rotations for teams whose roles cannot
be performed remotely as well as putting in place strict protocols
for hygiene and social distancing.
We remain confident in the strength of our brand and our
strategy. Until 24 January 2020, the consumer response to the new
product was very positive and as such, we are protecting key growth
initiatives in preparation for a recovery in luxury demand.
We have significant financial headroom including liquidity of
GBP0.9bn from GBP0.6bn cash balances (before lease obligations) and
a GBP0.3bn Revolving Credit Facility. In terms of leverage, at
September 2019, we had GBP0.4bn of net debt including lease
liabilities and we are operating with a net debt including lease
liabilities to EBITDA ratio within our targeted range of 0.5x to
1.0x.
This announcement anticipates and replaces our planned
extraordinary trading update in April. Our next scheduled
announcement is our Preliminary Results in May 2020.
Enquiries
Investors and analysts 020 3367 4458
Annabel Gleeson VP, Investor Relations Annabel.Gleeson@burberry.com
Media 020 3367 3764
Andrew Roberts VP, Corporate Relations Andrew.Roberts@burberry.com
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Certain statements made in this announcement are forward-looking
statements. Such statements are based on current expectations and
are subject to a number of risks and uncertainties that could cause
actual results to differ materially from any expected future
results in forward-looking statements. Burberry Group plc
undertakes no obligation to update these forward-looking statements
and will not publicly release any revisions it may make to these
forward-looking statements that may result from events or
circumstances arising after the date of this document. Nothing in
this announcement should be construed as a profit forecast. All
persons, wherever located, should consult any additional
disclosures that Burberry Group plc may make in any regulatory
announcements or documents which it publishes. All persons,
wherever located, should take note of these disclosures. This
announcement does not constitute an invitation to underwrite,
subscribe for or otherwise acquire or dispose of any Burberry Group
plc shares, in the UK, or in the US, or under the US Securities Act
1933 or in any other jurisdiction.
Notes to editors
-- Burberry is a global luxury brand with a distinctly British attitude.
-- Burberry is listed on the London Stock Exchange (BRBY.L) and
is a constituent of the FTSE 100 index. Its ADR symbol is
OTC:BURBY.
-- BURBERRY, the Equestrian Knight Device, the Burberry Check
and the Thomas Burberry Monogram and Print are trademarks belonging
to Burberry.
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END
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