Burberry profits fall 5pc despite boost in sales from weaker pound

Burberry profits fall 5pc despite boost in sales from weaker pound

Underlying profits dropped by 21%, which Burberry blamed on restructuring costs, lower wholesale income (down 14%), particularly in the USA and the Beauty arm, and a 48% reduction in licensing income.

Sales decreased 2%, and the firm noted tough trading in the U.S. and Hong Kong.

Profits for the year ended March 31 fell 7.3 percent to 286.8 million pounds, or $375.7 million, in line with analysts' expectations, while revenue in fiscal 2016-17 was down 10.4 percent on a reported basis, and 2 percent on an underlying one to 2.77 billion pounds, or $3.63 billion.

"For the industry, newness led growth and accessories outperformed while apparel saw softer trends". Cost reductions were partly offset by falling sales in the Americas, where the company has withdrawn from some retail outlets in non-premium locations and shortened its clearance period in an effort to make the brand more aspirational. In mainland China, sales growth accelerated in the latest quarter, rising to double-digit percentages from single digits earlier in the year, Burberry said. Bailey will continue as chief creative officer and take on the new title of president in July.

Christopher Bailey claimed the cost cutting measures Burberry Group PLC (LON:BRBY) introduced a year ago were starting to have an impact even though profits fell.

He said Gobbetti would strengthen the brand and take the company to the "next level as a global luxury retail and digital business". The campus opened in 2009 to an exacting design by chief executive Christopher Bailey as part of a £100 million efficiency plan aimed at bringing together executives who had previously been scattered around London. Bailey said he planned to work closely with Gobbetti as the company entered its next chapter, and he's approaching the future with "huge optimism" for Burberry.

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