Burberry's profits rise as cost cuts offset flat retail growth
Source - SMW
UK fashion brand Burberry said Thursday pre-tax profit rose sharply in the first half of the year as cost cuts helped offset flat retail revenue growth.
For the six months to 30 September, profit before tax rose 36% to £174m, while revenue fell 3% to £1.22bn from a year earlier.
Revenue growth was weighed down by stuttering growth in retail, which delivered revenues of £944m, in line with growth last year.
Net operating expenses fell to £652.6m from £747.5m a year earlier.
Regional sales growth was mixed as the UK and Italy saw improved performance, but the Middle East remained weak amid ongoing instability in the region.
Burberry maintained its guidance at constant currency for fiscal 2019 and said it remained on track to deliver cost savings of £100m. 'We are energised by the early results as we begin to transform and reposition Burberry. The initial response from influencers, press, buyers and customers to our new creative vision and Riccardo's debut collection Kingdom has been exceptional,' said Marco Gobbetti, Chief Executive Officer. 'Mindful that we are only in the first phase of our multi-year plan, we continue to manage dynamically through the transition. We confirm our outlook for the full year.'