UPDATE: UK: Burberry posts double-digit FY profit growth
- Full-year pre-tax profit rose 14% to GBP428m
- Revenue grew 8% to GBP2bn
- Comparable store sales rose by 5%
Luxury goods business Burberry has today (21 May) booked a 14% rise in full-year profit, bolstered by increased demand in China and Hong Kong and overseas store growth.
The company said underlying pre-tax profit reached GBP428m (US$648.3m) for the year to 31 March, compared to GBP376.2m in the same period last year.
Reported pre-tax profit, however, fell 4% to GBP351m against GBP366m, which included GBP83m of exceptional costs relating to the end of fragrance and beauty licence.
Revenue grew 8% to GBP2bn from GBP1.86bn the prior year. The group, which opened 45 new stores during the year, said retail sales were up 12%, while comparable store sales rose by 5%. Wholesale revenue slipped 1% and licensing sales edged up 1%.
Outerwear, large leather goods, men's wear and men's accessories drove revenue growth.
The results come after the company issued a full-year profit warning in September following a slowdown in sales.
"Finishing the year with a strong retail performance both online and offline, Burberry achieved record revenue and profit in 2012/13," chief executive officer Angela Ahrendts said.
"Looking ahead, although the macro environment remains uncertain, Burberry is well positioned with opportunity by channel, region and product. With the integration of beauty in April, we have added another exciting growth platform. Our brand momentum, proven strategies and closely connected global team provide confidence in Burberry's future performance."
Speaking to investors today, Ahrendts said in China, "we see opportunities to refine our assortments extending product sizing and fit, especially in men's apparel, where huge growth opportunities exist."
However, she added that the company is also well positioned for regional expansion in other high growth markets, including Latin America, the Middle East and India.
Underlying profit for the first half of the new fiscal year is expected to be below the GBP173m reported last time. Although Burberry plans to close 15 stores in 2014, around 25 mainline openings are expected.
CFO Carol Fairweather said: "The team remains focused on driving growth and profitability each year, although as the business model evolves, the phasing of profits is fading."
Commenting on the results, Conlumino fashion consultant Anusha Couttigane said: "This has been an exceptional year for Burberry, with reported revenues of GBP2bn marking the culmination of exhaustive investment in its global network over the last twelve months."
"Even in the face of recession there is a place for luxury retail. It may not be here [in the UK], but Burberry is adventurous enough to find it," she added.
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