Burberry profits took a dive in the year to the end of March, it said today, as chief executive Christopher Bailey prepared to step back into his old role.
Profits fell 21 per cent to £458.7m in the year to the end of March, Burberry said today, with earnings per share sliding six per cent to 64.9p.
However, although the brand said revenues dipped two per cent to £2.8bn, at reported foreign exchange levels, they actually rose 10 per cent. Retail made up 77 per cent of that, up three per cent on an underlying basis.
It added it expects to deliver £20m in full-year cost savings, which it plans to increase to £50m next year and at least £100m in 2019.
It also said it has completed a £150m share buyback, and aims to buy back £300m of shares by the end of next year.
Shares finished the day 4.7 per cent higher, at 1,718p.
Why it's interesting
It's been three and a half years since Burberry appointed Christopher Bailey, then its creative director, to the dual roles of chief executive and chief creative officer. Today he delivered his final set of results, before he ditches the chief executive job and focuses his attentions back on being creative director, handing the reins over to Marco Gobbetti. Shares are up 10 per cent since he was first named boss (despite a rollercoaster ride along the way).
The company, which said its major achievements this quarter have included an "evolved handbag offering", has been helped by weak sterling. Its popularity among Asian customers continues apace: sales in the region rose 15 per cent at reported foreign exchange levels, to £1.1bn.
But the brand is also in the midst of a cost-cutting drive, as demonstrated by that aim of delivering £100m in savings by 2019. Earlier this month it announced plans to move 300 jobs to Leeds, which Bailey said at the time will "continue to deliver on the strategic priorities we outlined last year". He also said it will "reinforce our commitment to... [the] home of our iconic trench coat". An important consideration...
Either way, it is in a reasonable position for incoming chief executive Gobetti, the former head of French brand Celine, who begins his new job in July.
What Burberry said
2017 was a year of transition for Burberry in a fast changing luxury market. The actions we have taken to lay the foundations for future growth are yielding early benefits and I remain confident that these will build over time.