14th May 2025 09:58
(Alliance News) - Burberry Group PLC on Wednesday announced new cost-cutting measures after reporting lower annual sales as its strategic reset continues.
The London-based luxury goods manufacturer reported a pretax loss of GBP66 million in the 52 weeks to March 29 compared with a profit of GBP383 million a year prior.
Adjusted operating profit plunged to GBP26 million from GBP418 million a year ago, while revenue fell 17% to GBP2.46 billion from GBP2.97 billion.
Chief Executive Officer Joshua Schulman said the company has "moved at pace" to implement 'Burberry Forward', a strategic plan to "improve performance and drive long-term value creation."
"The continued resilience of our outerwear and scarf categories reaffirms my belief that we have the most opportunity where we have the most authenticity. While we are operating against a difficult macroeconomic backdrop and are still in the early stages of our turnaround, I am more optimistic than ever that Burberry's best days are ahead and that we will deliver sustainable profitable growth over time," he added.
In response, shares in Burberry jumped 8.0% to 892.89 pence each in London on Wednesday morning. They have fallen 25% in the last 12 months.
Retail like-for-like sales fell 12%, Wholesale revenue dropped 37% and Licensing sales grew 6%.
By geography, Asia Pacific comparable store sales declined 16% in the financial year, Americas LFL sales fell 9% and in Europe, the Middle East, India, and Africa sales dropped by 8%.
Business in the UK continues to be seriously impacted by the withdrawal of VAT refunds for overseas visitors in 2021 which "has made the UK the least competitive destination in Europe for tourist shopping," the firm stated.
By product, outerwear and scarves continued to perform better than the group average in the year, ready-to-wear performed broadly in line with the group average in the year but leather goods lagged the group average in the year.
Burberry said its strategic plan is expected to unlock an additional GBP60 million of savings by financial 2027, in addition to the GBP40 million cost-savings programme already announced.
This could see the loss of 1,700 jobs, the firm said.
The associated one-off costs across both programmes are expected to total around GBP80 million.
Burberry said free cash was GB65 million, little changed from GBP63 million a year prior.
Looking ahead, Burberry said will deliver margin improvement with a continued focus on simplification, productivity and cash flow.
"We are confident that we are positioning the business for a return to sustainable, profitable growth," the firm added.
No dividend was declared compared to the 61.0p per share payout a year ago.
By Jeremy Cutler, Alliance News reporter
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