For the six months ending Sept. 30, the British luxurygoods maker posted a net profit of 113 million pounds (about $180 million) compared to 85 million pounds last year when Burberry paid out 142 million pounds to buy out its beauty license partner. Last month, Burberry forecast a first-half profit around the level of the previous year’s 173 million pounds.
Total revenue rose 17% to 1.03 billion pounds driven by a 17% increase in its retail revenue, which accounts for about 85% of total, to 694.5 million pounds. Comparable store sales grew 13%.
The strength at retail was particularly due to Asia Pacific, where Hong Kong performed very well and mainland China posted double-digit percentage comparable increases
Europe, Middle East, India and Africa reported double-digit percentage comparable store sales growth. Performance in the United Kingdom improved from last year when it suffered from disruption from the Olympics, Burberry reported.
Wholesale revenues rose 16% to 294.6 million pounds, including a first-time contribution from beauty.
Chief Design Officer Announced
We are proud to announce a first half performance that saw Burberry’s revenue exceed 1 billion pounds for the first time, reflecting the continuing strength of our global brand momentum,” said Angela Ahrendts, chief executive, who recently announced she would be stepping down next year to assume the role of Apple’s new retail chief.
Looking ahead, Burberry plans to open about 25 mainline stores in retail and close about 15. Burberry, which ended the half with net cash of 208 million pounds, expects the new openings to contribute low to mid single-digit percentage growth to retail revenue for the full 2013 to 2014 year. Underlying wholesale revenue, excluding beauty, is set to increase by a mid to high single-digit percentage in the six months to March 31.
Shares of Burberry have been down about 6% since Ahrendts announced her new appointment and Christopher Bailey, chief creative officer, was named to replace her as chief executive officer.
Bailey is to retain his creative officer role but Burberry also said a new post of “chief design officer” would be added to streamlined management—not to mention allay fears from analysts who may think Bailey is stretched to far.
Luc Goidadin, who has worked alongside Bailey for more than 12 years, was named to the new design officer position.
“This will allow me to continue to remain fully involved in setting the creative direction and vision for the brand,” said Bailey.