Celebrities, Fashion and Beauty

Burberry hails Kingdom as profits meet forecasts

Burberry hails Kingdom as profits meet forecasts

Burberry hails Kingdom as profits meet forecasts
November 08
14:26 2018

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Burberry hailed the “exceptional” response to its new creative head’s first collection as it reported half-year results in line with expectations and no changes to full-year forecasts.

It said that the “Kingdom” collection unveiled by Riccardo Tisci in September was “the second-most viewed show this season on Vogue.com and continues to be endorsed by some of the world’s most followed influencers”.

“Riccardo’s vision is of a Burberry that is as much for the young as for the old. Street influences play just as important a role as codes of luxury and sophistication.”

Half-year adjusted operating profit was £173m, slightly ahead of a company-compiled consensus of £169m. Sales fell 3 per cent, in line with forecasts. The interim dividend was unchanged at 11p. The trends were similar to those seen in the first quarter: Asian shoppers shifted their attention back to Asian destinations rather than buying in Europe, while the Middle East was weak due to macroeconomic factors.

Mr Tisci’s debut collection has attracted generally favourable reviews, although some have expressed surprise that it did not include more of the “streetwear” styles for which he was known at Givenchy, his former employer. 

The company has been supplying “capsules” of the collection to selected stores and online, but the volumes are not yet large enough to affect group revenues. Burberry said the drops had generated significant “brand heat” and online engagement. The main bulk of the spring/summer collection will arrive in stores in February, and from May all product sold will have been designed by Mr Tisci.

Most of the key trading periods — the “golden week” shopping extravaganza in Asia, Christmas and Chinese new year — also fall in the second half of the company’s financial year.

Shares in Burberry, the UK’s only large listed luxury goods company, have almost doubled in the two years since July 2016, helped by a weaker pound and investor confidence in the appointment of Marco Gobbetti as chief executive. However, since the summer they have weakened after Belgian investor Albert Frère sold his 6.6 per cent stake in the company. 

On Thursday morning they rose 0.7 per cent.

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