Burberry's full year revenue and profit growth remains flat


Announcing preliminary results for the 52 weeks ended March 30, 2019,
Burberry Group Plc said, revenue excluding beauty wholesale increased by 2
percent CER and 2 percent reported to 2,720 million pounds (3,492 million
dollars). Total revenue of 2,720 million pounds was down 1 percent CER and
flat reported. Comparable store sales for the year under review improved 2
percent, while wholesale sales excluding beauty rose 7 percent at
CER. Adjusted operating profit of 438 million pounds (562 million dollars)
was flat at CER, and down 6 percent reported. Gross margin was down
100bps.

“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,” said Marco
Gobbetti, Chief Executive Officer of Burberry in a statement.

Burberry reports preliminary results for FY19

Burberry added that adjusted operating margin of 16.1 percent was up
10bps at CER, and down 100bps reported, while reported operating profit of
437 million pounds increased 7 percent after adjusting charges of 1 million
pounds. Adjusted diluted was EPS 82.1p, up 7 percent CER, flat reported
supported by an effective tax rate reduction of 200bp and 7million share
repurchases, while reported diluted EPS of 81.7p, was up 19 percent
reported.

Confirming its outlook for the year ahead, Burberry said it expects
broadly stable revenue and adjusted operating margin at CER in FY 2020.
Burberry added that as planned, it anticipates a more pronounced weighting
of operating profit in H2 relative to H1 in FY 2020 than in the prior year.
The company also announced full year dividend per share up 3 percent to
42.5p, in line with progressive dividend policy.

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Burberry’s comparable store sales by region

Comparable store sales in Asia Pacific witnessed a low single digit
percentage growth with Mainland China delivering low single digit
percentage growth, with a stronger second half due to the shift of Chinese
spending away from other Asian tourist locations. Hong Kong, the company
said, was broadly stable with softer trends in the second half, Korea
increased low single digits benefiting from growth in local consumption as
well as exceptional spending from travelling Chinese consumers in the first
half of the year and Japan declined by a low single digit percentage
impacted by softer tourist flows towards the end of the year.

Comparable sales in the EMEIA region improved low single digit with the
UK delivering mid-single digit percentage growth, benefiting from improved
tourist spending in the second half. Continental Europe grew low single
digit and the Middle East declined, impacted by the macro-environment.
Comparable sales in the Americas were also up low single digit with the US
growing by a low single digit percentage with the second half negatively
impacted by softer local footfall trends.

The company continued to upgrade retail distribution network, closing a
net 18 stores including seven mainline, nine concessions and two outlets,
while store openings included the relocation and expansion of its Dubai
flagship and openings in Shin Kong Place, Xian (China).

Wholesale revenue improved 7 percent excluding beauty at CER and 8
percent reported. In October 2017, Beauty transitioned from a wholesale
business to a licensed partnership with Coty. Including the impact of this
change on the company’s H1 2019 results, full year total wholesale revenue
decreased by 8 percent at CER and 7 percent reported. Licensing revenue of
46 million pounds (59 million dollars), rose 53 percent at CER and 54
percent at reported, benefiting from beauty transitioning from a wholesale
to licensed business model. Excluding the impact of beauty, Burberry said,
licensing declined 3 million pounds due to the non-renewal of the watch
licence with Fossil.

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Picture:Burberry website



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