Burberry shares slide on outlook uncertainty
- FY underlying profit up 7%
- Revenues climb 11%
- Wholesale and retail profit outlook cut
Burberry said it delivered "a strong full year performance"
UK fashion business Burberry saw its shares fall this morning (20 May) as it revealed an expected GBP50m boost to profits in 2016 would be lower if exchange rates remain at current levels.
For the year to the end of March, underlying profit was up 7% to GBP456m (US$709.4m) from GBP461m a year earlier.
Revenues climbed 11% to GBP2.5bn from GBP2.33bn in the year ago period, boosted by growth in wholesale and retail.
CEO Christopher Bailey, said: "We are pleased to report a strong full year performance. Against a challenging external backdrop, our global team has focused ever more intensely on our core, including celebrating the British-made products that are our brand signature and extending our online and offline integration."
Despite this, the company has warned that if exchange rates remained at current levels, wholesale and retail profit for fiscal 2016 would likely be GBP40m lower than guidance given in the group's April trading update.
Bailey added: "At this early stage of the year, we are seeing increased uncertainty in some markets. Against this background, we will continue to manage our business dynamically - capitalising on the significant opportunities we have by channel, region and product to create long-term shareholder value."
Conlumino Consultant, Andrew Hall, noted: "Ultimately, Burberry remains one of the most exciting fashion houses and has proven both brave and shrewd in its approach to business, reflected in its ability to offset lower store footfall with higher conversion rates. Challenges inevitably lie ahead for a retailer with Burberry’s stratospheric ambitions, but it looks well-positioned to meet them head on."
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