Burberry profit down 10 percent, chalks out measures for growth

Burberry has said that its revenues stood at 2.5 billion pounds (3.6 billion dollars) and adjusted PBT was 421 million pounds (607 million dollars), down 10 percent underlying for the year ended March 31, 2016. The company has also announced an ambitious three year plan to drive revenue growth, improve productivity and deliver at least 100 million pounds (144 million dollars) of cost savings amid challenging external environment.

Elaborating on the company’s poor performance, Christopher Bailey, Chief Creative and Chief Executive Officer, said, “While we expect the challenging environment for the luxury sector to continue in the near term, we are firmly committed to making the changes needed to drive Burberry's future outperformance, underpinned by strong brand and business fundamentals.”

FY 2016 performance and growth initiatives

Revenue was down 1 percent underlying and comparable sales declined 1 percent for the year under review. Comparable sales were up 3 percent excluding Hong Kong and Macau.

Licensing profit was down 19 million pounds (27 million dollars, which the company said was according to the plan, as Japanese licences expire. Reported profit before tax decreased to 416 million pounds (600 million dollars). Burberry announced full year dividend of 37p, up 5 percent.

Initiatives identified by the company to deliver enhanced revenue growth and improved productivity include strong brand with significant opportunities by channel, product and region, plan to outperform sector growth over time, focus on key products, retail productivity and e-commerce, in-depth review of ways of working results in plan to reduce complexity and simplify processes to enable future growth and a programme to deliver annualised cost savings of at least 100 million pounds (144 million dollars) by FY 2019.

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