Company says plans for growth are “on track” as sales increase thanks to drop in the value of the pound
Burberry has reported a 5% increase in profits in the first half of 2016/17, thanks in part to increased tourism in the UK.
The company said that comparable sales to travelling luxury customers rose 30% in the UK, boosted by the falling value of the pound this summer.
We remain on track to deliver our financial goals.”
— Christopher Bailey, CEO and Chief Creative, Burberry
Burberry now estimates that the decreased value of sterling will add £105m to its full-year profits.
Christopher Bailey, Burberry’s CEO and Chief Creative, admitted that the company was still working in “a challenging external environment”.
He said: “The progress we are making to improve our ways of working, the agility of our teams to react to changes in consumer behaviour and the strength of our brand give us confidence for the future. We remain on track to deliver our financial goals.”
Fragrances My Burberry and Mr Burberry were said to have “performed well”, gaining market share in key regions.
However, this was offset by a significant drop in revenues in wholesale for beauty. Burberry said that “cautious ordering and strategic brand control” was behind the 20% drop.
Joshua Raymond, Director at XTB told Cosmetics Business: “The good news is that in every area of Burberry’s most important sales areas, there is improvement.” Raymond also noted that Burberry’s cost-cutting scheme remains on track.
He added: “The share price has been extremely well supported since the start of July, rising more than 40%. Given the outlook and a stronger quarter on quarter performance, shareholders will be expecting this momentum to continue.”