“Though the momentum we had built was disrupted by COVID-19 at the start of the year, we were quick to adapt, while making further progress against our strategy. While the virus continues to impact sales in EMEIA, Japan and South Asia Pacific, we are encouraged by our overall recovery and the strong response to our brand and product, particularly among new and younger customers. In an environment which remains uncertain, we will continue to deliver exceptional product, localise plans and shift resources, while leveraging the strength of our digital platform to inspire customers.” – Marco Gobbetti, Chief Executive Officer
•H1 FY2021 saw a 31% revenue fall with adjusted operating profit down 75 % and adjusted diluted EPS down 88 % (reported diluted EPS down 66 %).
•Recovery underway with sequential improvement in comparable store sales to -6 % in Q2 FY2021 from -45 % in Q1 FY2021 and returning to growth in October
•Q2 FY2021 saw strong double digit growth in Mainland China, Korea and the U.S.; EMEIA, Japan and South Asia Pacific remain impacted by the significant reduction in tourism.
•Good strategic progress despite COVID, especially in four areas:
o Strong response to product with marked increase in the weight of full-price channels YoY
o Growth in leather goods – outperforming the average retail comp
o Excellent growth on digital, up high double digits
- Good brand traction as we attract new and younger customers
- Performance underpinned by rigorous management of cost and cash with long term financing in place with the issue of a sustainability bond
Outlook FY2021
We are encouraged by the recovery in Q2 FY2021 but remain conscious of the uncertain macro-economic environment caused by COVID-19. We currently have more than 10% of our stores closed globally following the recent lockdowns in EMEIA. With the brand resonating and attracting new and younger consumers, we have taken the decision to reduce markdowns and this will be a revenue headwind in H2 FY2021 with the main impact in Q3 FY2021 but will serve the long term interest of the brand. We are well positioned to continue to drive performance and deliver growth in the medium term.
The financial information contained herein is unaudited.
All metrics and commentary in the Interim Review exclude adjusting items unless stated otherwise.
Constant exchange rates (CER) removes the effect of changes in exchange rates compared to the prior period. This takes into account both the impact of the movement in exchange rates on the translation of overseas subsidiaries’ results and also on foreign currency procurement and sales through the Group’s UK supply chain.
The following alternative performance measures are presented in this announcement: adjusted profit measures, comparable sales, free cash flow, adjusted EBITDA and net debt. The definitions of these alternative performance measures are set out in the Appendix on page 14.
Cumulative cost savings are savings compared to FY 2016 operating expenses. The savings relating to the store rationalisation programme are measured compared to the reported costs which were under IAS 17.
Certain financial data within this announcement have been rounded.