UK: Burberry warns of FY currency headwinds hit
Burberry said currency headwinds could negatively hit its annual profits by GBP55m
British luxury brand Burberry has warned that exchange rates could weigh on full-year profit, despite booking a double-digit increase in first-quarter retail sales.
The company said the rising strength of the pound could impact its annual profits negatively by GBP55m (US$94.2m) if exchange rates remain the same.
In the first trading update with new chief executive Christopher Bailey in control, the company said underlying retail revenue jumped 17% to GBP370m during the three months to 30 June. On a reported basis, retail revenues were up 9%. Comparable sales increased 12%, driven by planned investment.
Asia Pacific and the Americas regions enjoyed double-digit comparable store sales growth, while Europe, Middle East, India and Africa (EMEIA) reported a low single-digit increase.
"This first quarter performance reflects our focus on striving to give customers the best possible experience of the Burberry brand through ongoing investment in retail, digital and service, both on and offline," Bailey said.
"With great brand momentum and a focused vision, we remain confident of delivering sustainable, profitable growth into the future," he later added.
Charles Stanley Research analyst Sam Hart said although significant foreign exchange headwinds and the move of Japanese operations from a licensing model to a fully owned and operated model are likely to "act as a brake on growth in 2015/16", underlying profit growth will "remain healthy" in both years.
"We expect global demand for luxury goods to remain reasonably buoyant over the medium term, given our expectation that the global economic environment will continue to slowly improve and our belief that luxury goods is a long term structural growth market."
And Burberry appears "particularly well positioned" to benefit from the trend, according to Hart.
Richard Hunter, analyst at Hargreaves Lansdown Stockbrokers, is also positive about the results. "Today's update is showing signs of blowing away some cobwebs from Burberry's recent chequered history.
And although the company's share price has been weak, updates like this will "continue to exert positive pressure on the market consensus which, for the moment, remains anchored at a strong hold", he added.
Far Eastern New Century Corp, one of Tawian's leading textile conglomerates, is planning to invest TWD10bn (US$323m) to set up an integrated production site for yarn, fabrics, dyeing and apparel in Vi...
Burberry Group plc (BRBY) - Financial and Strategic SWOT Analysis Review provides you an in-depth strategic SWOT analysis of the company’s businesses and operations. The profile has been compiled by G...
This report provides information, analysis and valuable insight on developments relating to the global apparel industry in the following categories: acquisitions, divestments and mergers; corporate ...
A concentration of Chinese counterfeit businesses in several Italian provinces associated with the textile and apparel industry have been identified, a new report show....
Canadean's "Stella International Holdings Limited - Company Capsule" contains in depth information and data about the company and its operations. The profile contains a company overview, key facts, ma...
The report titled “Singapore Luxury Goods Market Outlook to 2017 – Rising HNWI Population to Propel the Growth” provides a comprehensive analysis of the market size of Singapore luxury goods Industry ...
- Yuan devaluation impact mixed for garment firms
- Will Vietnam struggle with impending trade deals?
- Supply chain improvements to save Billabong $30m
- Chaos in the world’s trade agreements
- Nicaragua apparel and shoe firms to double in size
- H&M scaling up living wage effort to key suppliers
- Myanmar approves first minimum wage
- US Q2 in brief: Genesco, Oxford, Sears Canada
- EU clothing buyers should brace for higher prices
- PVH “well-positioned” in China despite headwinds
- Global Database of the Top 1000 Apparel Producers - Company Names, Financial Performance, and Contact Details
- Myanmar's Garment Sector in 2015 - now with updated members' directory
- Ethiopia – the emerging textile and clothing industry
- Global market review of lingerie - forecasts to 2020
- Global Sports Footwear Market 2015-2019