Burberry reports 14% rise in first-half profit, despite flat revenue
Burberry reported a 14% rise in first-half profit, despite flat revenue, and said sales in the third quarter were looking stronger than in the prior quarter.
The British luxury house said pretax profit for the first six months of the year came in at £119.5 million ($181.8 million), compared with £104.5 million in the same period last year, which was hurt by one-time costs.
Burberry last month reported half-year revenue of £1.1 billion, roughly flat with a year earlier. At the time, it reported its same-store sales climbed just 1%, a marked slowdown from the 10% reported for the same period last year. Burberry has blamed traveling Chinese consumers and its geographic mix for the weak results. A weaker euro has made shopping in Europe cheaper for Chinese tourists, but the relatively strong British pound has discouraged tourist spending in Burberry’s home market of the U.K., where it has a major presence.
Burberry updated its prior expectations, saying that for fiscal 2016 it expects retail and wholesale profit to see no material benefit from exchange rates, which is a shift from its statement last month that it expects a benefit of about £10 million.
The company said that since the start of the third quarter, comparable sales, “although volatile, have improved overall relative to the second quarter.”