Second Half Trading Update

Burberry Group PLC
17 April 2007



Burberry Group plc


Second Half 2006/07 Trading Update


17 April 2007. Burberry Group plc reports on trading for the six months ended 31
March 2007.



Second Half Financial Highlights

   •Total revenue increased 20% on an underlying(1) basis, 19% reported(2)
   •Retail sales increased 24% underlying, driven by new and existing stores

        -  in the fourth quarter, retail sales increased 24% underlying

   •Wholesale revenue increased 17% underlying
   •Licensing revenue increased 15% underlying
   •2007/08 outlook

        -  13% approximate average retail space expansion

        -  Mid-teens first half underlying wholesale revenue growth

        -  Broadly flat underlying licensing revenue relative to 2006/07


Revenue by geographical origin (statutory accounts format)

                                                      Second Half
                                                    --------------                                            
 £ million                                2006/07                 2005/06(2) 
Europe(excluding Spain)                      144                       111
Spain                                          87                        68
North America                                 113                        98
Asia Pacific                                  115                       107
                                          -------                  --------
            Total                             458                       384



Revenue by channel of distribution

                             Second Half                                           Full Year
                       ----------------------                               -----------------------
                                 ---                                                   ---      
                  Reported                   % change                  Reported                   % change
                -----------                ------------              -----------                -------------
            ------        ------      ------          ------      ------       ------
£ million  2006/07     2005/06(2)   Reported    Underlying(1)    2006/07    2005/06(2)      Reported    Underlying(1)
            ------        ------      ------         -------      ------       ------         ------       --------

Retail        241            192         25              24          410          319             29             24
Wholesale     172            151         14              17          354          343              3              8
Licence        45             41          9              15           86           81              6             10
           ------         ------     ------         -------       ------       ------         ------       --------
Total         458            384         19              20          850          743             14             15


(1) Second half underlying figures exclude the financial effect of the portion
of Burberry's business in Spain affected by the retail conversion, in both
reporting periods. In addition, full year underlying figures also include the
first half adjustment for the Taiwan acquisition. For both periods, underlying
figures are calculated at the same exchange rates used in the 2005/06 reported
results. Burberry initiated actions related to the retail conversion in Spain
during the third quarter of 2005/06.

(2) As reported in the 2005/06 Preliminary Results presentation and statement,
following change in foreign currency translation methodology.





Commenting on the trading results, Angela Ahrendts, Chief Executive Officer,
stated, 'Burberry achieved outstanding 20% underlying revenue growth in the
second half. The significant investment initiated during this financial year to
enhance the luxury component of the brand, advance retail expansion and evolve
our operating model is driving accelerated growth across all three channels:
retail, wholesale and licensing. This performance is consistent with our
expectations for the full financial year.'



Total revenue

Total revenue in the second half ended 31 March 2007 increased 20% on an
underlying basis (i.e. adjusted for (i) the portion of Burberry's business in
Spain affected by the retail conversion and (ii) exchange rate differences). The
Spain retail conversion shifts sales from Burberry's wholesale channel to its
retail channel. In determining underlying performance, the financial effect of
the affected business is excluded from both reporting periods. Total reported
revenue increased 19%. Adverse exchange rate movements reduced the reported gain
by approximately five percentage points.


 Second Half Retail and Wholesale Revenue by Geographical Market (Destination)

                                  Reported                   % change
                                ------------               -------------
                                                       -------  -- --------
Region                     2006/07   2005/06(2)       Reported        Underlying
--------------             -------      -------        -------          --------

Europe (excluding Spain)       120           99             21                21
Spain                           77           60             28                 5
North America                  115          100             15                25
Asia Pacific                    92           78             18                24
Other                           10            6             74                74
                           -------      -------        -------          --------
                  Total        413          343             20                21



Retail

Retail sales accounted for approximately 53% of total revenue in the second
half.


Second half retail sales increased 24% underlying, 25% reported. Comparable
store sales increased 12%. Underlying average retail selling space increased
approximately 14% in the half with the opening of six stores, a net eight
concessions and one outlet. The Spain retail conversion contributed
approximately eight percentage points of the reported gain. Currency movements
reduced the reported gain by approximately six percentage points.


Retail sales in the fourth quarter increased 24% underlying, 25% reported.
Comparable store sales increased 11% (against a 6% comparison) and underlying
average selling space increased 13% in the quarter. The Spain retail conversion
contributed approximately eight percentage points of the reported gain. Currency
movements reduced the reported gain by approximately seven percentage points.
During the quarter, Burberry opened four stores, including Manchester (UK),
Prague (Czech Republic) and Seville (Spain), and a net three concessions.


In the fourth quarter, all regions achieved double-digit gains. In the US,
performance was balanced between existing and new store contributions. Gains at
existing stores and concessions led excellent results in Continental European
markets. In their second spring season, womenswear concessions in Spain
demonstrated notable progress. The UK market, continuing to benefit from the
Group's increased investment during the year, produced strong gains. Momentum in
Asia Pacific continued, led by Hong Kong and other Southeast Asian markets.


Enthusiastic consumer response to spring merchandise following reduced end of
season sale activity in January was a consistent factor underpinning performance
in the fourth quarter. Outstanding outerwear sales, driven by updated styles and
balanced assortments, led gains. Luxury handbags and runway apparel continued to
experience excellent demand. Investment in design and development during the
year has been a key factor enabling this product progress. Operationally, these
initiatives were supported by a more frequent flow of new merchandise to stores
relative to the comparative period and continued execution of a basic
replenishment programme.



Wholesale

Wholesale sales accounted for approximately 37% of total revenue in the second
half.


The wholesale momentum of the first half gathered pace with the spring season.
Wholesale sales increased 17% underlying in the second half with double-digit
increases in most regions. Currency movements reduced the reported gain by
approximately three percentage points. The US achieved excellent gains largely
through increased penetration of core accounts. Sustained demand across the
majority of markets, particularly Italy, Germany and Greece, drove strong
performance in Europe. Spain was broadly flat in the half as ongoing channel
dynamics continued to weigh on results. Stimulated by demand in the travel
retail sector, wholesale sales in Asia achieved strong gains. Initial sales of
global products in the Japanese market also contributed to growth. Emerging
markets continued to show strength. Throughout the period, wholesale sales were
boosted by initial success of the basic replenishment programme introduced in
the third quarter and incremental orders associated with the new market
calendar.


In conjunction with local franchise partners, the Group opened two stores in the
half.



Licensing

Licensing revenue in the half increased 15% on an underlying basis, 9% reported.
Reported revenue was affected by adverse exchange rate movements relative to the
previous period. In Japan, strong volume gains among apparel and other ongoing
licences offset the effect of licence terminations, producing a good underlying
gain for the period. Excellent growth in product licence revenue was led by
fragrances, which benefited from introduction of the new Burberry Summer
fragrance, as well as the ongoing effect of the 2006 Burberry London fragrance
launches. The first collection under Burberry's new global eyewear agreement
launched during the period. Supported by an extensive marketing campaign on a
plan to distribution in 15,000 doors worldwide, eyewear contributed
significantly to product licence revenue in the half. Watches continued to
demonstrate good progress in the period.



Operational efficiency

The Group completed the closure of a Welsh manufacturing facility in March 2007,
following a proposal made in September 2006. In the 2006/07 financial year, this
will result in a cash cost of approximately £4.8 million to cover an enhanced
redundancy package and outplacement and training services for affected
employees, and a non-cash expense of approximately £1.7million associated with
asset write-offs. Expense savings associated with the elimination of
manufacturing losses are expected to be approximately £1.5 million annually.


Project Atlas continues on track. During the second half, key system deployments
were implemented as scheduled, with minor changes to originally planned phasing
in accordance with the pace of change in Burberry's business. Atlas expenses are
expected to total approximately £21 million for the 2006/07 financial year.
Associated expense benefits are anticipated at approximately £6 million.



2007/08 outlook

Burberry's current outlook for the 2007/08 financial year includes the following
features:

   • Retail. An approximate 13% increase in average retail selling space. The
     majority of space expansion will be concentrated in the US and European
     markets.
   • Wholesale. Based upon orders received to date, first half wholesale
     sales are expected to achieve a mid-teens percentage underlying gain
     relative to the comparative period.
   • Licensing. Broadly flat underlying licensing revenue relative to
     2006/07
        -  Licences in Japan are expected to produce a moderate
           underlying revenue gain for the year primarily as a result of
           continued apparel growth.

        -  Growth in selected license product categories is expected to
           be offset by decreases at others, reflecting product cycle stages
           and channel transitions.

        -  On a reported basis, yen-related exchange rate movements
           will reduce licensing revenue by approximately £7 million.
   • Project Atlas. In keeping with alterations to system implementation
     phasing required by changes in the business, Atlas expenses are
     budgeted at approximately £15 million for the financial year. In
     line with previous statements, the Group anticipates aggregate
     expense benefits associated with Project Atlas of approximately £20
     million in the period.
   • Capital expenditures. Capital expenditures are budgeted at approximately 
     £60 million.



     Burberry will release its preliminary results for the year ended 31
     March 2007 on 24 May 2007.



    Enquiries:

    Burberry                   020 7968 0577

    Stacey Cartwright          CFO
    Matt McEvoy                Strategy and IR


    Brunswick                  020 7404 5959

    David Yelland
    Laura Cummings
    Robert Gardener





    The financial information contained in this Trading Update has not been
    audited.


    Certain statements made in this Trading Update 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.


    This announcement does not constitute an invitation to underwrite, subscribe
    for or otherwise acquire or dispose of any Burberry Group plc shares. Past
    performance is not a guide to future performance and persons needing advice
    should consult an independent financial adviser.




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