Burberry Profits Slide 7.3% in Major Year of Change

Details at Burberry RTW Fall 2017
Burberry Fall 2017.
Aitor Rosás

In a year of transition, cost management and restructuring, profits at Burberry Group fell 7.3 percent to 286.8 million pounds, or $375.7 million, in the 12-month period through March 31.

Revenue for the year fell 10.4 percent on a reported basis and 2 percent on an underlying one, to 2.77 billion pounds, or $3.63 billion.

Burberry shares on the London Stock Exchange were up 1.9 percent at 16.72 pounds, or $21.64, following the announcement.

All figures have been calculated at average exchange rates for the periods to which they refer.

Christopher Bailey, chief creative and chief executive officer, called 2017 a year of transition for Burberry in a fast-changing luxury market.

“The actions we have taken to lay the foundations for future growth are yielding early benefits, and I remain confident that these will build over time,” he said.

Bailey reiterated that Marco Gobbetti will assume the role of chief executive officer from July, “and with his extensive experience in the sector, we will build on these foundations to elevate and strengthen the brand further. I am excited to work closely with him in this next chapter.”

Profit in the period was hit by a variety of adjusting items, including lower than previously planned beauty revenue. The company has radically slashed its number of wholesale distributors and incurred additional costs associated with the transfer of beauty operations to Coty, which is set for October.

The company was also hit by planned restructuring charges of 20.8 million pounds, or $27.2 million, relating to Burberry’s new cost and efficiency program, in line with guidance.

Burberry said its full-year dividend would be 38.9 pence, or $0.50, up 5 percent year-on-year, and said guidance for the current 2017-18 fiscal year remained unchanged.