(Alliance News) - Burberry Group PLC on Thursday reported a recovery into the end of its financial year as it brought its payout back to pre-pandemic levels.
Revenue for the year to March 27 fell 11% to GBP2.34 billion, in line with market consensus, from GBP2.63 billion the year before. The fall in revenue, which was down 10% at constant exchange rates, was due to store closures and reduced tourism, Burberry said, though with a strong recovery in the second half.
Adjusted operating profit, meanwhile, slipped by 9% year-on-year to GBP396 million. According to company-compiled consensus, adjusted operating profit was predicted to have fallen 13% to GBP378 million from GBP433 million.
However, as a result of net operating expenses being cut by 25% to GBP1.14 billion from GBP1.52 billion, pretax profit nearly tripled GBP490.2 million from GBP168.5 million.
The luxury fashion brand said its recovery accelerated through the year, leading to fourth-quarter comparable store sales rising 32% year-on-year, and down 5% on two years ago, even with an average of 16% of stores being closed.
Comparable fourth-quarter sales were up 17% on two years ago in Asia Pacific and up 15% in the Americas, but they were down by 44% in Europe, Middle East, India and Africa.
Full-price sales rose by 63% from a year before and by 12% from two years ago, driven by sales in mainland China, Korea and the US.
Burberry declared a full-year dividend at the financial 2019 level of 42.5p on the back of strong cash generation with the progressive policy reinstated. This compares to just an interim dividend of 11.3p paid out for the 2020 financial year.
Looking ahead, Burberry said it expects revenue to grow at a high single-digit percentage compound annual growth rate at current constant exchange rates in the medium term. This will be underpinned by the continued outperformance of full-price sales.
The company, however, warned that it expects it adjusted operating margin progression to be impacted by operating expense normalisation and increased investment to accelerate growth, with more meaningful margin accretion thereafter.
"In the last three years we have transformed our business and built a new Burberry, anchored firmly in luxury," commented Chief Executive Officer Marco Gobbetti. "We have revitalised our brand image, renewed our product offer and elevated our customer experience while making further progress on our ambitious social and environmental agenda."
Burberry shares were trading 7.8% lower in London on Thursday morning at 1,939.50p each.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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