// Burberry cancels dividend payouts in the wake of 27% sales plunge in Q4
// Full-year revenue declined 3% to £2.63bn while operating profit slumped 8% to £404m
// Burberry said 60% of its stores were shut due to lockdowns by the end of Q4
Burberry has cancelled its final dividend and warned that luxury retail could take a while to recover from the Covid-19 pandemic, after reporting plunging sales in the final quarter.
The luxury fashion retailer reported a 27 per cent drop in comparable sales in the final quarter of its year ending March 28.
Burberry said given the uncertain outlook it decided to pull its final dividend and would review future payouts at the end of its 2021 financial year.
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Looking at its financial year in full, Burberry reported revenue of £2.63 billion, which was down by three per cent year-on-year.
Meanwhile pro-forma adjusted operating profit came in at £404 million for the year, down eight per cent at constant exchange rates.
The retailer’s quarter had ended with about 60 per cent of its stores worldwide closed due to coronavirus lockdowns.
Burberry had a challenging start to the quarter when its sales in China – one of its most important markets – started to fall sharply as the coronavirus gripped the country before it escalated into a pandemic.
As Covid-19 gripped Europe and North America, Burberry said it suffered significant losses in March in those regions, with all of its stores there closed by the end of the year.
The heritage British retailer added that it has been “encouraged” by the recovery currently taking place in China and Korea, although footfall in other parts of Asia, such as Hong Kong, remained weak.
Despite this, chief Executive Marco Gobbetti said Burberry was making strong progress in its strategy to reposition the brand, with sales growing ahead of expectations prior to the coronavirus.
Burberry also made a number of cost savings to limit the financial impact of coronavirus, including renegotiating rents and restricting recruitment, travel and other discretionary spend.
“Prior to Covid-19, we were delivering strong momentum across our brand and product, with sales ahead of our expectations,” Gobbetti said.
“Since then, the global health emergency has had a profound impact on the world, our industry and Burberry but I am very proud of the way we have responded.
“We have taken swift action to mitigate the financial impact on our business, while prioritising the safety and wellbeing of our teams and customers.
“We have a strong balance sheet and liquidity, with space for investment when markets recover.
“We have found new ways to strengthen our connection with consumers, drawing on our digital leadership. We have also mobilised our resources in support of the relief efforts.
”It will take time to heal but we are encouraged by our strong rebound in some parts of Asia.”