Burberry Group saw first-half profits drop 39.7 percent to 72 million pounds, or $98.6 million, as underlying revenue in the six months to Sept. 30 fell 4 percent, due partly to anticipated declines in wholesale, licensing and the beauty business.
Reported revenue for the period rose 5 percent to 1.16 billion pounds, or $1.52 billion, boosted by currency tailwinds.
New and ongoing charges also weighed on the bottom line, including restructuring costs as the company slims down to save money. Adjusted pre-tax profit was down 4 percent to 146 million pounds, or $200 million, on a reported basis, buoyed by the weak pound. Underlying adjusted pre-tax profit fell 24 percent.
Reported pre-tax profit fell 34 percent to 102 million pounds, or $140 million. The results were in line with the company’s projections.
Christopher Bailey, chief creative and chief executive officer, gave an update on the company’s restructuring program.
“In May, we outlined plans to evolve how we work as a business and to drive Burberry’s future growth in a rapidly changing luxury environment,” he said. “Since then, we have made good early progress towards realizing the significant opportunities ahead of us, as we begin implementing our five strategies. We remain on track to deliver our financial goals.”
As reported, the company is looking to save at least 100 million pounds, or $124 million, by 2019 as it aims to outstrip luxury sector growth going forward.
Burberry added that retail/wholesale profit for the full year should benefit further from the shrinking pound, getting a 125 million pounds, or $155 million, boost based on Oct. 31 exchange rates, compared with a 105 million pounds, or $130 million, based on Sept. 30 rates.