Burberry profit fall emphasises task awaiting new chief
- Author: Zachary Reyes May 19, 2017,
May 19, 2017, 0:05
Current chief executive Christopher Bailey will become the group's president when Marco Gobbetti, the former boss of French fashion house Céline, takes over as chief executive in July.
Burberry, the United Kingdom luxury fashion group, managed to scrape an increase in reported profit past year thanks to a sharp fall in sterling.
Adjusted earnings for the year, the company said, were £462 million, just ahead of the £453 million FactSet-compiled estimate.
Christopher Bailey, who is now in charge of both creative and executive duties at the company, said it had been a year of "transition" in a fast changing luxury market.
Cost savings delivered £20mln in 2017, which will rise to £50mln in the current year and at least £100m annualised in 2019. "The actions we have taken to lay the foundations for future growth are yielding early benefits and I remain confident that these will build over time", said Bailey.
Christopher Bailey claimed the cost cutting measures Burberry Group PLC (LON:BRBY) introduced past year were starting to have an impact even though profits fell.
Stated profits fell 5% to £395mln with revenues 2% down at £2.77bn as currencies had a major impact.
He said Thursday, during an analyst presentation following the 2016-17 results announcement, that a highlight of his tenure as ceo was recruiting Gobbetti, the former Céline ceo who joined Burberry earlier this year as executive chairman for Asia-Pacific and Middle East. "I am excited to work closely with him in this next chapter".
Burberry shares were marked 2.5% higher at closed at 1,683 pence each in London, the biggest jump since April 7, extending their year-to-date gain past 11%. Incoming Burberry CEO Marco Gobbetti will face pressure to secure a larger share of that growth for Burberry when he starts the job in July.