Retailer saw FX tailwind from Brexit-induced Sterling collapse offset declining US sales
Companies: Burberry Group plc
British fashion retailer Burberry has reported a 21% fall in underlying pre-tax profit in its full-year results, citing weaker US sales. The firm benefitted considerably from FX tailwinds, with reported pre-tax profit falling by 10%.
Reported revenue rose 10% to £2.8bn, but fell 2% on an underlying basis, while the cost of sales increased 10% to £833m. Pre-tax profit decreased by a more modest 5% Yoy, resulting in an EPS of 65p - 6% lower YoY.
The EU-Referendum has had mixed effects on the Group, with the Brexit-induced collapse in the value of Sterling boosting revenues and offsetting on declining sales in the US, but the subsequent rise in inflation and fall in consumer confidence has caused sector-wide uncertainty.
The firm says its cost savings programme is on track and set to deliver £20m in FY17, £50m in FY18, and at least £100m annualised by FY19. As part of this, the company is relocating services away from London to Leeds.
CEO and Chief Creative Chris Bailey said it had been a transitional year for Burberry in the 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 added that he believed Marco Gobbetti would bring extensive sector experience and help build on the foundations to elevate and strengthen the brand, and help it become a more digital business
