Burberry reported double-digit underlying profit growth in the first half and announced a rationalisation programme that would cost £15m.
The group reported first half revenue of £1,263m, +4% underlying, +9% reported.
It said growth was led by retail comparable store sales +4% (Q1: +4%; Q2 +5%) with strength in Asia Pacific as some markets improved in the second quarter.
- Adjusted operating profit £185m, +17% underlying, +28% reported
* Benefiting from phasing of costs between halves and a significant improvement in the profitability of Beauty year-on-year
- Reported operating profit £127m, + 24% reported after adjusting items principally relating to restructuring and the transition of Beauty to Coty
- Adjusted diluted EPS 32.3p, +32% supported by the repurchase of 15m shares in the last twelve months. Diluted reported EPS 21.4p, +32%
In a strategy update it said that the sector had changed and the luxury consumer demanded innovation, curation and excitement from brands and creativity at every turn.
Chief executive Marco Gobbetti said: 'Now is the right time for Burberry to implement the next phase of its transformation.
'By re-energising our product and customer experience to establish our position firmly in luxury, we will play in the most rewarding, enduring segment of the market.
'We have the foundations to build on and the team to execute our plans.
'This will enable us to drive sustainable growth and higher margins over time, whilst continuing to deliver attractive returns to shareholders.'
FY 2019 and FY 2020:
- Revenue and adjusted operating margin are expected to be broadly stable year-on-year at constant exchange rates, reflecting
- The accelerated delivery of the full £100m cumulative cost savings in FY 2019 and £120m cumulative annualised cost savings in FY 2020
- Offset by investment and the rationalisation of non-luxury points of sale - One-off restructuring charges of c.£15m are currently expected in FY 2019
- Capex is expected to be at £150m-£160m per annum
At 9:07am: (LON:BRBY) Burberry Group PLC share price was -235p at 1750p