Luxury goods giant Burberry has recorded a 12% fall in pre-tax first-half profit, to which it cited adverse currency movements as the reason. The British brand posted a 6% increase in underlying profit to £152m in six months to 30 September. When taking foreign exchange movements into consideration however, profits were down 12% to £142m, with a £31m hit from currency effects to blame (resulting in a £75m cost in sales to Burberry).
According to the brand, Chinese customers had not been spending as much as usual and demand from Russian customers was also lower.
Burberry has also said that raw material for its new perfumes business had been ordered in greater volumes than needed, resulting in a £7.5m write-off for the fashion and beauty retailer. The brand recently took back the licence to make its perfumes.
Despite tough conditions, Burberry’s Chief Financial Office, Carol Fairweather, said she expected the pound would not make as much impact in the next six months. “We think we have never been better positioned for the festive period” Fairweather said.
The Christmas quarter has been positive so far, with its campaign featuring Romeo Beckham having attracted over 5m views across social media sites.
This Christmas is Christopher Bailey’s first season as Chief Executive at Burberry, who took the position in May, combining it with his Chief Creative Officer title.
“Looking ahead, in a more difficult external environment, we continue to focus on the things that we can control,” said Christopher Bailey, Chief Executive. Bailey is “confident of Burberry’s sustained outperformance”.