Burberry has posted a rise in underlying pre-tax profits but has lowered its profit guidance for next year due to foreign exchange movements.
- Underlying revenues and profits up at Burberry
- Exchange rate movements significantly lower revenues and profits
- Luxury retailer is also seeing increased uncertainty in some markets
Adjusted pre-tax profit rose 7% on an underlying basis to £456m before for the year ending March 31, but were down 1% when foreign exchange movements were taken into account.
Revenues during the period increased 11% on an underlying basis to £2.52bn during the period.
Exchange rates during the financial year reduced reported revenue by £72m and adjusted pre-tax profit by £38m.
Burberry chief creative and chief executive officer Christopher Bailey said: “Against a challenging external backdrop, our global team has focused ever more intensely on our core, including celebrating the British made products that are our brand signature and extending our online and offline integration.
“At this early stage of the year, we are seeing increased uncertainty in some markets. Against this background, we will continue to manage our business dynamically - capitalising on the significant opportunities we have by channel, region and product to create long-term shareholder value.”
Burberry reports that if exchange rates remain at current levels its profits for the 2016 financail year will be £40m lower than the guidance it gave at its second half trading update in April.
The retailer struggled in its high margin market Hong Kong after it recorded a fall in spend from Chinese customers in the second half of the year due to protests.
However, the fall was “more than offset” by growth in EMEIA and other parts of Asia Pacific and the Americas.