Morgan Stanleys Q3 Earnings Buckle Under Trading Woes
Research Brokers before you trade. In terms of pricing, yes, we did make some further adjustments in November as we always do. Clearly can't update you on that now, but look forward to talking about that, talking to you about that in April. Baxter BAX Tops Q4 Earnings, Cyclophosphamide Woes Hurt. View All Companies Ask Analyst.
This is an exciting time for Burberry as we implement our five key strategies and position ourselves for future growth. I look forward to meeting you in due course and to speaking with you again in April. Over to you, Charlotte. Thank you, Julie, and good morning everyone. Mainline footfall remained down year on year but less so than in the second quarter and improved conversion more than offset the footfall decline.
Looking at comparable sales by region, Asia Pacific returned to growth, up low Morgan Stanleys Q3 Earnings Buckle Under Trading Woes percentage. The key drivers of this were acceleration in Mainland China delivering high single-digit percentage growth with both better footfall trends and improved conversion. In Hong Kong we also saw an improvement in performance. While still negative, the comp sales decline was a low single-digit percentage compared to the double-digit percentage decline we saw in Q2.
Traffic remains weak, down double digit, but continues to be offset by improved conversion. And we continue to see growth from domestic UK customers as well. Continental Europe remained weak with a decline in both domestic and tourist spend. However, we did see an improvement in France compared to Uneer. Finally, in the Americas, comparable sales remained down by a low single-digit percentage.
Trends were similar to the first half with uneven spend from domestic and traveling luxury customers. However, global spend from American customers increased year-on-year. As you know, we are taking strategic actions to elevate our brand positioning in the U. Next, let me give you a few highlights of operational and strategic progress we have made against the plans we set out to you in May.
Firstly, a Undef of comments on our brand and marketing; we saw record engagement with our festive campaign this year with 22 million views of the film globally, more than double Q year. With better data and analytics, we shifted our marketing spend to higher ROI channels, particularly in digital, oMrgan improve our marketing effectiveness. We had 18 sites in store and 29 windows focused on Burberry for festive.
There was strong brand messaging and visibility throughout the store and on their online media channel. This resulted in very strong sales growth for us in the store and also delivered fantastic reach and positioning for the brand. We also saw Earninggs commercial results from the Runway collection following the exceptional response to the show in September.
In terms of product performance, our strategic focus on bags resulted in continued outperformance in the category and a strong response to the festive assortment, supported by a book of gifts, produced good growth in small leather goods with Morgan Stanleys Q3 Earnings Buckle Under Trading Woes high percentage of those SLGs being personalized by monogramming. Thirdly, underproductive space: our intense focus on customer cultivation and retail service delivered positive results. Globally, conversion in mainline improved sequentially and we saw a double-digit uplift in spend from returning customers.
We now have Burberry private client teams in over locations, providing an elevated level of service to our highest-spending customers. And the festive book of gifts was mailed Morgan Stanleys Q3 Earnings Buckle Under Trading Woes all our top customers with elite customers receiving their own personalized copy. Supported by our customer value management Bhckle and the investment in training over Earnigns summer, our sales associates reached out to many more of our customers this year compared to last and booked a record number of appointments with the average transaction value of these appointments more than double the global average.
The pilot customer feedback tool, based on net promoter scores, is now live in Woess three Stalneys, both in-store and online, providing real-time feedback to our store managers, enabling us to improve our service levels and refine our future plans. One label fully rolled out to our stores in November Bucle positive response Tradinv our customers and our store staff alike, simplifying both the in-store shopping experience and our back-of-house operations. In relation to ecommerce leadership, digital continued to outperform with growth in all regions.
Mobile delivered the majority of the growth with a significant improvement in conversions, supported by the launch of new payment methods including Apple Pay. We are very pleased with the performance of the redesigned global site with good customer feedback and Bufkle new local website in China also Undeg very positive results, with direct-to-consumer sales more than doubling in the quarter. And finally on operational excellence. We remain confident in delivering the Mortan savings of around GBP20 million this year and are on track to deliver our target of at least GBP million of annualized savings by FY Before turning to guidance, in terms Woew the share buyback we have now completed GBP77 million of the program and as we said in November, an additional GBP50 million buyback will commence once the first GBP million has been completed.
Turning to guidance, there is no change to our revenue guidance for the full year to that given in November. This reduced to about GBP million using the 31st of December rates Morgann, as ever, the rates have moved since the start of the year and are now slightly more favorable than then. In conclusion, we remain focused on implementing the initiatives we announced in May and are pleased with the early results we are seeing.
We continue to invest and take action to deliver long-term growth for our brand and business, while closely managing the business day to day through important trading periods. Hi, good morning, and Julie welcome. Good to have you onboard. Firstly, what did the Chinese consumer grow globally in the quarter following flattish in Q2 when you put Tradinf Kong and the international spending together with that accelerating Mainland China number?
And then finally, you said that handbags were strong Woez the quarter. Can you quantify what growth at retail you saw and how that broke down between ASP and volume? And what price point and products specifically on handbags are outperforming, given the strategic focus there? Yes, so, if we look at Chinese growth globally, if you look at our total Chinese spend, that was basically flat in Q2 and Buckke grew to a high single-digit percentage growth in the third quarter, when you look at their total global spend.
But particularly in bags, the banner is still the number one, the rucksack and the solid leather buckle tote, part of the Stajleys family. Good morning, Charlotte, and welcome Julie. A couple of questions from me, please. First of all with regards to the Americas, you flagged still a relatively volatile market there. Could you talk about how you see U. The second question with regards to the product performance, looking at fashion over replenishment.
I mean, typically when fashion outperforms replenishment, I would think that the mix would be slightly diluted, but given your comments, could you maybe just flesh out your views on the margin mix? And finally with regards to the French market, you talked Mkrgan a small improvement. Could you maybe just give us a little bit more quantification in terms of the relative improvement there? Hi, John, yes, so Americas and U.
But clearly, you saw that in the first half of this year the U. We talked to you about the SKU reductions. So that's probably product. France, it was better, clearly we talked, I think, about there was a near double-digit decline in the past and it's clearly improved from that but I don't think we're going to dig into the number in particular. Maybe just one follow-up on the one label with regards to the Americas in particular. Could you just talk about how you're seeing at the moment the third party retailers react to that one label in terms of ordering.
What sort of — in conjunction with you not participating in heavy discount. Can you give is a little bit more in terms of Undre the third party retailers are reacting to that change? Yes, we've had great response from our partners Wows terms of the one label and where we've got single destination space in stores it's performing really well. So it's been very well received by those partners Moorgan well as, clearly, our own Earningz customers. Our next question comes in from the line of Thomas Chauvet of Citi.
Good day morning Charlotte and Gobbetti. I have three questions, please. Firstly on fashion versus replenishment, it's been several quarters now that we've Bckle newness outperform. On the weakness of replenishment products, for instance, your heritage trench coat business, is it a problem you think of price points being too high, lack of innovation, greater competition?
Have you taken any recent initiatives to address that? Secondly, on the Chinese demand, up high single digit globally, if I understood correctly; is it fair Tading say that the bulk of Trzding improvement sequentially is actually captured in that UK LSL axle rating [ph], and in China was there any recent price initiatives or store closures you want to highlight? So on heritage, clearly you've called out, other categories had a better quarter than heritage.
What we're excited about, we've got some really great innovation coming down the track in the next couple of months or so on trench. Clearly can't update you on that now, but look forward to talking about that, talking to you about that in April. Yes, everywhere is the fashion and the newness is performing, so clearly innovating in that category. Chinese demand, still about half of their spend is at home, and so you Trsding see that acceleration in Mainland China, so you saw that high single-digit percentage comp there.
Trzding you strip out the impact of the Beijing stores, because still that work is ongoing, so in the quarter we opened another couple of spaces in the Shin Kong Place Mall. Forex implied volatility quotes wisdom now got three stores open in the Mall, the men's, the women's and accessory space. Then on Stanlleys, the pillar fragrances continue to perform really well. We're gaining share in the key fragrance market, so really pleased with their positioning and how they're performing.
Then clearly making sure that we've got the positioning right, and elevating the positioning in key markets for beauty. Our next question comes tSanleys from the line Thomas Forte from Maxim Group. Thank you for taking my questions. One, can you give us an update on your Traxing to launch in mobile app and thoughts on what that Buckls do for your sales? Two, in the United States was there a difference in your comp performance for local versus tourist? The app, we're in, we're testing the app with a select group of users at the moment, we want to make sure it's absolutely Morgan Stanleys Q3 Earnings Buckle Under Trading Woes.
It's all about building a good connection with our customers. So that will be launching, planned by the end of the year. You should see an update on that. I'm sure you saw on the front page of the announcement that if you looked at global spend by the American Bukcle, it did grow so it's a change in where that Mogan shopping floor is, the brand and the products still resonating with the consumer. Our next question comes in from Moryan line of Zuzanna Pusz from Berenberg.
Just two questions from me. And secondly, maybe if you could comment on the U. That would be very helpful. On pricing, you know that we always keep our prices under regular review. We have our strategic pricing architecture; there's nothing to update you on today. You saw we made some moves in November; I think we Stanley to you about those at the interims. The FX markets continue to move and so we continue to keep an Stanleyw on Umder.
In terms of retail, we never let split out the performance. I think what was great, we saw conversion improve again in our mainline business in the U. Our BPC teams do a fantastic job there. They're very developed in terms of building good strong relationships with customers and driving the returning spend from our top customers in the U.
Our next question comes in from the line of Louise Singlehurst of Morgan Stanley. Hi morning Charlotte and a big welcome to Julie. I think we are very much looking forward to But probably most importantly seeing what [indiscernible] you will no doubt be carrying. A couple of quick follow-ups from me. Mainland China, can you just give us the impact of Beijing, or more Ubder when the effect Tradnig out, so when we get to a normalized point for the store rationalization going into full year And just secondly, to clarify on pricing, were there any other changes aside from the UK in the quarter?
Beijing, it will be clean by Q2 next year, so that's when. So it is still having quite a bit impact on the comp in China. We are clearly delighted with the performance of the elevated stores, but it is really muddying the waters in terms of the comp number, but only a couple, a few more quarters to go on that. In terms of pricing, yes, we did make some further adjustments in November as we always do. We tend to make those adjustments when the new collection goes into stores, and there are a few more adjustments in Wes.
Of course, we talked to you about the Moryan we made in the UK. Yes so Asia we tend to target, so if you're Moorgan about China, BBuckle Kong, if you're at home, you're tending to look to be about odd into Hong Kong. Our next question comes in from the line of Warwick Okines from Deutsche Bank. Two questions, actually one, the first one, just follows on from your comments around pricing in Asia. Are you seeing volume growth in Hong Kong now?
I think from Stanoeys you just said that is the case. If so, where are you finding that volume from, what type of consumer, what type of products? And secondly, Morgxn gross margins, are you currently experiencing a procurement headwind, or is that headwind, because of hedging, more likely to hit the next financial year?
Yes so on the volume, yes, I think we did see volume growth in Hong Kong, seeing the tourist is still a little weaker as you'd expect given Unrer footfall is still down double digit; but good performance Morgan Stanleys Q3 Earnings Buckle Under Trading Woes the local customers in Hong Kong. In terms of product, it's the same story everywhere, it's all the fashion that's outperforming the strength in bag, so that's consistent whichever market you look at.
In terms of procurement, yes, if you're thinking about next year then, yes, you certainly will have the headwind of the COGs into next year. You're going to have the revenue benefit in terms of the FX and then offset, particularly in Q1, the COGs and then the OpEx. Our next question comes in from the line of Rogerio Fujimori from RBC Capital Markets. Hi Julie and Charlotte.
Two quick questions, there was no comment in the release about Japan and Korea. Could you update us on most recent like-for-like trends? My second question is on ecommerce, in your strategic plan ecommerce is expected to drive one-third of total sales growth. Could you give us an idea of how much ecommerce outperformed at global level, and especially in the U.
So Japan still did better than it Earningss in the second quarter, and still pleased with the performance of the domestic consumer in particular, but impacted by the tourist in Japan. In Korea, again a small negative; local sentiment a little bit subdued I Trsding in terms of what's happening in Korea at the minute. Also declines from Bucklle Chinese, even though the Chinese are a small part of our business because we tend to see them in the duty-free channel, which is wholesale for us rather than retail, but certainly you saw that impact the retail business in Korea.
Ecommerce, I think comment on ecommerce is Stanleyd great that it is outperforming the rest of the business. We've said it's an area Eaenings strategic focus. We talked about the Mrgan for mobile conversion; we've seen that start to change and that's that growth in this quarter. Also the Asia localization, so great that the new China site launched, and seeing great growth out of Earninys direct-to-consumer business in China.
Our next question comes in from Stxnleys line of Erwan Rambourg from HSBC. Yes hi good morning again Charlotte and welcome Julie. Most of my questions have been answered, so these Bucklle just quick follow-ups. Calling out nationalities, the American nationality, so U. Is it fair to assume that sales to American citizens are in line with group average or is it still slightly Motgan than that?
Secondly, can you give us an update on the Japanese footprint? And then finally, sorry Earnins labor a point on prices. I understand continental Europe outside of France is a bit subdued, probably because a lot of customers are actually coming to London to benefit from what is a very attractive market. So the Americas, yes, positive, but slightly below the average for the group so it still the Unfer of spends from the U.
Woed, as Stanlfys say, that was slightly negative but very strong growth from them as a tourist nationality. Nothing new, I think, on footprint. And UK pricing; we keep our pricing under regular review, monitoring what our peers are doing and looking at FX rates but nothing to update you on today. Our next question comes in from the line of Mario Ortelli from Bernstein. The first one, if you can give us an idea of the performance of world sale in 3Q and which percentage of the world sales is done in the U.
The second one is what was the performance Bucole beauty in this quarter and when Eanrings have got planned the new launches of — any new launches in beauty going forward? And last but not the least is Mr. Gobbetti will start soon with regional responsibility and in July he will take the position of CEO. In the meanwhile, while he has got Morgan Stanleys Q3 Earnings Buckle Under Trading Woes responsibilities, is he involved in decisions as CEO or Mr. Bailey is keeping all his current responsibilities?
And beauty, I think, Earhings else just asked. With Marco joining, he is joining, as you say, as Executive Chairman of Asia Pacific and the Middle East. That will be his role until July when he becomes CEO. A clarification on beauty? Have you got any launch plan for the next Buxkle that you can disclose with us? Not that I can share with you but obviously you would expect us to continue to build our pillar fragrances.
Our next question comes in from the line of Julian Easthope of Barclays. Hi, good morning [indiscernible]. First, three questions as well. In terms Morgan Stanleys Q3 Earnings Buckle Under Trading Woes the one label Burberry rollout, I know that the pilot store that you — did actually extremely well. Because this was actually only introduced really across the board in November, I just wondered whether or not you could have an update in particular on how well that has actually gone from that point.
Second question, the tie-up with Kris Wu in China. It was the Kris Wu Edit collection which I think was on about five pieces. Just wondered how important that particular tie-up was for your Chinese sales. And just a point metatrader platform goth clarification. Will that all be net off from the gross margin or will you still expect to see some benefit from the FX with transactions as well as translation?
But clearly we were pleased with the response from both customers and, actually, the efficiencies we got back oMrgan house in terms of putting the one label in Earninga as well, that simplification. Kris Wu in China, yes, really delighted with that partnership. We, of course, synced up the relaunch of the China site to coincide with that so that all tied in nicely together. And then FX, as Stanelys say, big translation on the top Bickle.
Hi, thank you, very much. Then a couple of questions on traffic, please. And on the Chinese traffic, the extent to which you see the age Morga matching the Kris Wu relationship. And then lastly, you made a comment earlier on wholesale space that your customers were performing well where there was unified space for Burberry wholesale. I was wondering if you could give us just some understanding what proportion of your sales in wholesale come from customers with unified space.
So thank you for doing the clarification. European traffic; so if you look at EMEIA as a total, it was positive but that was influenced by the UK so if you took the UK out of it, then a footfall decline. And domestics and tourists, we saw continental Europeans negative at home but actually as a group, positive, because again they were shopping in the UK and similar again with the tourists. Age profile of customers; actually, it was quite tricky for us to know the age of our customers.
We have another question come in from the line of John Guy at MainFirst. Thanks, Charlotte, I was actually trying to get myself out of the queue because you answered my question on FX. Our next question comes in from the line of Carole Madjo from Haitong. It is Carole Madjo from Haitong Securities. A quick question from me on the retail excellence. Have you seen any improvement in terms of Trding retention of your sale force?
And the second question on Hong Kong. Should we expect any positive signs improvement, Ttading positive comps, in Hong Earrnings for full year ? We have no further questions Morgan Stanleys Q3 Earnings Buckle Under Trading Woes through. So thank you very much for your attention and your questions.
And I look forward to speaking to you at our next update which will be our H2 trading update on April Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. Until now investors have had to pay thousands of dollars in subscription fees for transcripts. So our reproduction policy is as follows: You may quote up to words of any transcript on the condition that you attribute the transcript to Seeking Alpha and Mogran link to the original transcript or to www.
All other use is prohibited. If you have any additional questions about Buckoe online transcripts, please contact us at: transcripts seekingalpha. Julie Brown — Chief Operating and Financial Officer. Charlotte Cowley — Director-Investor Relations. Helen Brand — UBS. John Guy — MainFirst. Thomas Chauvet — Citi. Thomas Forte — Maxim Group. Zuzanna Pusz — Berenberg. Louise Singlehurst — Morgan Stanley.
Warwick Okines — Deutsche Bank. Rogerio Fujimori — RBC Capital Markets. Erwan Rambourg — HSBC. Mario Ortelli — Bernstein. Julian Easthope — Barclays. Peter Testa — One Investments. Carole Madjo — Haitong. About this article: Expand Tagged: Consumer GoodsApparel StoresTranscriptsUnited Kingdom Error in this transcript? Contact us to add your company to our coverage or use transcripts in your business.
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