Tuesday, January 18, 2022

Burberry reports stagnant financial performance in first quarter

Burberry has reported unchanged underlying retail revenue year-on-year in its latest trading update, just two days after the luxury retailer appointed a new chief executive and overhauled its senior managment.

The British fashion icon posted a three per cent dip in like-for-like sales in the three months to June 30, with sales in Asia Pacific increasing except for Hong Kong and Macau. 

Meanwhile, the retailer’s revenue was £423 million which Burberry said was unchanged on an underlying basis and sales in the UK showed mid-single digit percentage growth.

Chief creative officer and president Christopher Bailey, will lead the company alongside new chief executive Marco Gobbetti next year and jointly report to the company chairman, put down the “challenging external environment” as reasons for the company’s stagnant first quarter performance.

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“In what remained a challenging external environment, underlying retail sales were flat in the first quarter,” he said in a statement.

“In this context, we continue to focus on managing our business with agility whilst implementing the ambitious evolution of our strategies and ways of working we outlined in May, to position Burberry for long-term growth. 

“These plans are now well underway and on track to deliver our financial goals. This progress, together with our recent management appointments, gives us real confidence for the future.”

In May, the company launched a £100m cost-cutting campaign in response to falling profits, which saw it slim down its product range and focus on handbags.

Burberry predicted its adjusted profits could be at about £90 million in the full year to March 31, 2017, thanks to the falling value in the pound boosting its overseas income. 

Burberry has 214 shops and 213 concession stores across the world. It will hold its annual general meeting tomorrow.

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