British luxury goods group Burberry has released its preliminary full-year financial results, in which it reported total revenue down by 1% at constant exchange rates (CER) from £2,733m to £2,720m for the year 2018/19.
In the year ending 30 March 2019 the fashion brand saw gross profit down 2% at CER from £1,897m to £1,861m year-on-year from £1,897m, with wholesale revenue excluding beauty up 7% at CER. Gross margin was down 100 basis points (bps) due to the impact of Forex (FX) and growing investment in products.
Operating expenses were down 1% benefitting from incremental costs saving of £41m, while adjusted operating profit was down 6% to £438m year-on-year from £467m, and adjusted operating margin was 16.1%, up 10bps at CER.
Reported operating profit was up 7% to £437m year-on-year from £410m after adjusting charges of £1m compared with the previous year that saw adjusted charges of £57m. Profit before tax was also up 7% to £441m year-on-year from £413m.
Adjusted diluted earnings per share (EPS) were flat at 82.1p, with reported diluted EPS up 19.1% to 81.7p year-on-year from 68.4p. The company saw full-year dividend per share up 3% to 42.5p year-on-year from 41.3p from a progressive dividend policy.
Burberry chief executive officer Marco Gobbetti said: “We made excellent progress in the first year of our plan to transform Burberry, while at the same time delivering financial performance in line with expectations. Riccardo Tisci’s first collections arrived in stores at the end of February and the initial reaction from customers is very encouraging. The implementation of our plan is on track, we are energised by the early results and we confirm our outlook for FY 2020.”
Burberry should invest more in online sales: GlobalData analyst
GlobalData senior retail analyst Chloe Collins commented: “Burberry must continue to invest in technology and marketing to build its online sales further, and find a way to import these innovations into its store portfolio, with 80 flagship stores currently undergoing a revival.
“After beginning its exit of non-luxury wholesale accounts, Burberry must use its new range to find suitable alternatives, and ensure it is utilising the potential of its existing partnerships, such as Selfridges and online powerhouse Farfetch, which are both seeing growth.”