Burberry says at 'inflection point' as swings to annual profit

Burberry Group PLC on Thursday reported a swing to an annual profit, as the luxury retailer’s turnaround progresses.

In addition, it said it has named its next chair, with incumbent Gerry Murphy retiring later this year.

Burberry said pretax profit in the year to March 28 amounted to £49 million, swinging from a loss of £66 million the year prior.

Revenue, however, fell 1.7% to £2.42 billion from £2.46 billion. The outcome was just shy of consensus, as revenue of £2.43 billion had been expected, according to company compiled consensus.

Burberry shares were down 3.2% at 1,125.00 pence each in London on Thursday morning.

Revenue was flat at constant currency, as expected. Reported operating profit was £115 million, swinging from a £3 million loss and beating consensus of £104 million.

Burberry, famed for its trench coats and signature beige check pattern, said fourth quarter comparable store sales rose 5% in the final quarter alone, also in line with consensus.

There was 10% growth in the Americas and also in China, while in the Asia Pacific region, growth was 2%. In the Europe, the Middle East, India & Africa grouping, comparable store sales were down 2% in the final quarter.

‘Q4 declined 2% due to the continued impact of reduced tourist activity in the region and the Middle East conflict towards the end of the quarter,’ the firm explained.

For the full-year, retail revenue edged down 1.0% to £2.06 billion from £2.08 billion. Wholesale revenue was 5.0% lower at £303 million from £319 million.

For the new financial year, it expects wholesale revenue to grow by a mid-single digit percentage in the first half, from £148 million a year prior.

Capital expenditure of £120 million is expected for the full-year, with a restructuring charge of around £5 million. Restructuring costs in the year just ended rose to £45 million from £29 million.

Annualised cost savings are expected to be around £100 million by financial 2027, with £80 million delivered in the year just gone.

‘This financial year marks a meaningful inflection point for Burberry. We’ve returned to profitable comparable sales growth, with a strong fourth quarter driven by momentum in Greater China and Americas. Our strategy is working and there are clear opportunities for further growth. As we look ahead, while mindful of the uncertain macro-economic environment, our focus is on disciplined execution of Burberry forward. With increased brand relevance and product authority, I am more confident than ever that Burberry is firmly positioned for long-term value creation,’ Chief Executive Officer Joshua Schulman said.

The company unveiled its ‘Burberry Forward’ strategic plan back in November 2024. The firm aimed to reignite the brand by returning to its roots as a quintessentially British luxury house.

Also on Thursday, it named William Jackson as its next chair, replacing Gerry Murphy who is to leave on the day Burberry releases interim results in November. Jackson joins the company as a non-executive director on July 1, standing for re-election at the annual general meeting a fortnight later.

Jackson is the founder and former chief executive officer of Bridgepoint Group PLC.

‘Under his leadership Bridgepoint became a substantial global investment organisation with interests in many consumer-facing businesses, including brands such as Pret a Manger and MotoGP. William chaired both of these brands throughout their transformative growth years while building the wider Bridgepoint portfolio,’ Burberry said.

He previously served as a non-executive at property investor British Land PLC and a senior independent director at housebuilder Berkeley Group Holdings PLC.

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