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LONDON (Alliance News) - Luxury retailer Burberry Group PLC on Thursday said it made "excellent progress" in the first year of its transformation plan, with profit rising 6.8% and revenue in line with market expectations.
For the financial year that ended March 30, the retailer, known for its checked print and trench coats, posted pretax profit of GBP440.6 million, compared to GBP412.6 million a year ago.
This was achieved on the back of lower operating expenses, reducing to GBP1.42 billion from GBP1.49 billion.
Revenue met analysts expectations, coming in broadly flat at GBP2.72 billion from GBP2.73 billion.
Comparable retail store sales also met analysts' forecasts, rising 2% in the full-year, slowing from the 3% posted for 2018. Meanwhile. Wholesale revenue rose 7%, ahead of the retailer's expectations due to the timing of shipments.
Adjusted operating profit however lagged behind market consensus, coming in at GBP438 million, down 6% year-on-year from GBP4667 million. Analysts had seen this registering at GBP442 million.
"We made excellent progress in the first year of our plan to transform Burberry, while at the same time delivering financial performance in line with expectations," Chief Executive Officer Marco Gobetti said.
The retailer raised its annual dividend 2.9% to 42.5 pence per share from 41.3p.
This was after increasing its final payout to 31.5p from 30.3p while maintaining the interim dividend flat at 11p.
In financial 2020, Burberry expects to launch a GBP150 million share buyback.
In the past year-and-a-half, Burberry has seen some significant management changes as it seeks to reposition the brand.
CEO Gobbetti took over the top job at Burberry in July 2018, coming from French leather goods firm Celine. He replaced Christopher Bailey, who had been with the fashion house since 2001.
Then, former Givenchy creative director Riccardo Tisci was chosen as Burberry's chief creative officer in March last year. In September Tisci presented his first collection, which arrived in stores in February with "very encouraging" initial reaction from customers.
Looking ahead, Gobetti said: "The implementation of our plan is on track, we are energised by the early results, and we confirm our outlook for financial 2020."
Burberry reaffirmed its guidance for broadly stable revenue and adjusted operating margin in the current year. Furthermore, the retailer expects to deliver cost savings of GBP135 million within financial 2022 as a result of its transformation plan.
