- Wendela van den Broek |
Luxury goods group Burberry reported profits before tax for the first six months ended 30 september were up 9 percent to 154.7 million pounds on revenues of 1.105 billion pounds, compared with 1.100 billion a year ago. Earnings per share rose 14 percent to 26.7 pence.
Earnings per share rose 14 percent on a year ago to 26.7 pence. While profit from wholesale and retail activities rose 5 percent on an underlying basis, licensing profit dropped 13 percent as a result of the expiry of Japanese licences.
Burberry referred to its results as ‘robust amidst a challenging environment for luxury’. “We enter the second half mindful of this backdrop, but confident in our strongest-ever festive plans and emphasis on productivity and efficiency,” said CEO and chief creative officer Christopher Bailey in a statement.
Comparable sales were up 6 percent in the first quarter but dropped 4 percent in the second quarter, slowing down in all regions, and reflecting less demand for luxury, particularly from Chinese customers.
The new festive film, starring celebrities like Sir Elton John and Romeo Beckham, received over 11 million views across various media platforms in the first 48 hours, a coup for the company’s brand building efforts. In addition, it has expanded the global distribution of its Beaty division, which it refers to as ‘under penetrated’, in stores and online with strategic partners. Merging its three brands into one and plans to build another factory for the production of its iconic trenchcoats will increase efficiency and productivity.
Burberry also announced that it has raised its interim dividend by 5 percent to 10.2 percent.
Looking ahead, the company expects new retail space to contribute to low single-digit percentage growth in total retail revenue. Total wholesale revenue is expected to remain ‘broadly unchanged’ from the same period last year, which was 331 million pounds. Meanwhile, licensing sales are expected to be down by about 40 percent at constant exchange rates due to the expiry of Japanese licenses.