Burberry posts 62% fall in H1 profits

Burberry (LON: BRBY) has posted a 62% fall in pre-tax profits for the six months ending 26 September 2020.

The luxury retailer revealed a 31% decline in revenue and adjusted operating profit down 75%.

Sales were down 31% to £878m, whilst first-half pretax profits fell from £193m to £73m.

The retailer noted that despite the pandemic, it had seen strong strategic progress particularly in leather goods, growth on digital, and good brand traction.

Marco Gobbetti, the chief executive, said: “Though the momentum we had built was disrupted by COVID-19 at the start of the year, we were quick to adapt, while making further progress against our strategy. While the virus continues to impact sales in EMEIA, Japan and South Asia Pacific, we are encouraged by our overall recovery and the strong response to our brand and product, particularly among new and younger customers.

“In an environment which remains uncertain, we will continue to deliver exceptional product, localise plans and shift resources, while leveraging the strength of our digital platform to inspire customers.”

Looking forward, Burberry said in a statement: “We are encouraged by the recovery in Q2 FY2021 but remain conscious of the uncertain macro-economic environment caused by COVID-19. We currently have more than 10% of our stores closed globally following the recent lockdowns in EMEIA. With the brand resonating and attracting new and younger consumers, we have taken the decision to reduce markdowns and this will be a revenue headwind in H2 FY2021 with the main impact in Q3 FY2021 but will serve the long term interest of the brand. We are well positioned to continue to drive performance and deliver growth in the medium term.”

Burberry shares (LON: BRBY) opened 3.66% higher and are currently trading 2.65% higher at 1.670,11 (0952GMT).