Burberry’s first-half earnings decline 12 percent
Burberry’s adjusted pretax profit for the six months ended Sept. 30 fell to GBP 152.3 million pounds ($242.5 million) from GBP 173.9 million. The company reported a 14 percent rise in underlying revenues to GBP 1.1 billion for the first half of the year, but admitted that exchange rates had wiped £75m off revenues and £31m off profit before tax.
Sales were up across all regions, driven by a concerted effort to improve its online shopping service in China, the sale of accessories and people buying its trench coats and bags online.
Burberry said last month it anticipated a slight downward pressure on full-year margins as sales growth slows in Asia and Russian shoppers curb travel because of sanctions. “In a more difficult external environment, we continue to focus on the things that we can control,” Burberry CEO and creative head Christopher Bailey said in today’s statement. “We remain confident of Burberry’s sustained outperformance.”
Burberry also said it was seeing growth balanced across its main product ranges including rainwear, men’s tailoring and leather bags. Accessories, its biggest product range, delivered a 14pc rise in underlying sales to £387m.
The company’s outlook “seems inspired by prudence,” Luca Solca, an analyst at Exane BNP Paribas said. “Today’s attention will be focused on Burberry’s ability to maintain growth momentum as consensus still expects 7.5 percent underlying growth in the second half.”
Six-month retail revenue rose 8 percent to 748 million pounds, Burberry said last month. Sales growth slowed in the second quarter from the first on a comparable basis. Burberry said it doesn’t expect currency fluctuations to have a “material” impact in the second half of fiscal 2015 if rates remain at Nov. 3 levels, taking into account current hedged positions.