Burberry has posted an 8 per cent rise in adjusted profit before tax to £461m as its investment in the Japanese market was “well underway.”
The 158 year old company, known for its camel trench coats and check patterns, posted a revenue rise in its retail/wholesale 19 per cent while comparable sales rose 12 per cent. Net cash was up £106m to £403m.
Burberry said the results “demonstrated the ongoing strength of the brand” while chief executive Christopher Bailey, who replaced Angela Ahrendts last week, said he was “confident” for the brand‘s outlook.
Investors and journalists have reportedly been skeptical that Bailey, who is a fashion designer by trade, can lead a £2.5bn luxury company.
It confirmed it would look to open store in Tokyo and Osaka. Bailey said: “As we enter a new chapter, our teams are united and energised by the opportunities ahead – from unlocking Japan, to accelerating Beauty and further integrating the physical and digital to deliver distinctive experiences.”
“The strength of this performance reflects sustained strategic focus, continued investment, disciplined execution and outstanding brand momentum during the year,” he added.
Burberry also announced a new initiative with Amazon and Alibaba‘s Tmall and will sell a cosmetics line through the US online retailer.
Neil Shah, analyst at Edison Investment Research, commented: ”Burberry shares may pause for breath over the near term over currency concerns which will hit margins and profits for the year ahead if sterling continues its strong run. For the past month‘s share price rally to continue, investors will want to see some early evidence that the greater push into beauty will not come at the expense of further margin erosion to be persuaded that underlying growth momentum can continue at this current high pace.”
