Burberry has posted an increase in full-year profitability as boss Marco Gobbetti hailed “promising early signs” in its transformation plan.
The luxury fashion retailer posted a 5% profit gain to £410m during the year to March 31, and revealed a £150m share buy-back scheme as it seeks to push ahead with its turnaround strategy.
Overall sales were flat year on year, with total revenue of £2.73bn representing a marginal decline on last year’s £2.76bn. At constant exchange rates, and excluding wholesale beauty revenue, Burberry said revenues increased 2%.
Like-for-likes grew 3% during the 12-month period, despite a second-half slowdown following a 4% uplift in its first half.
Its UK business delivered “low single-digit percentage growth” despite an “expected” dip in the latter months of the year.
International sales were also strong, particularly in its key Asia-Pacific region.
Gobbetti said: “In a year of transition, we are pleased with our performance as we begin to execute our strategy.
“While the task of transforming Burberry is still before us, the first steps we implemented to re-energise our brand are showing promising early signs.”
Burberry has shaken up its board in recent months, drafting in Givenchy’s Riccardo Tisci to succeed former chief creative officer Christopher Bailey and appointing ex-Kingfisher executive Gerry Murphy as chairman.
It has also brought in Gavin Haig as its new chief commercial officer.
Earlier this week, Burberry signed a deal to acquire a luxury leather goods business from long-standing Italian partner CF&P.
The purchase is seen as an attempt to make up lost ground in the crucial handbag category, an area where it has been regarded as losing ground on its rivals.
Burberry has also been working hard to control costs and revealed today that it delivered savings of £44m during the year, ahead of its plan, bringing total savings to £64m.
It said it is on track to achieve cumulative cost savings of £100m by the end of 2018/19.
The luxury business said 2019 performance is expected to be “in line with guidance” as it presses ahead with its strategy, which includes a greater emphasis on digital, including an online partnership with Farfetch in more than 150 markets.
Gobbetti said Burberry is well placed to make further progress, adding: “With Riccardo Tisci now on board and a strong leadership team in place, we are excited about the year ahead and remain fully focused on our strategy to deliver long-term sustainable value.”