Burberry misses profit views, warns of virus hit

Burberry Group PLC reported Friday a significant fall in pretax profit for fiscal 2020 and warned of having a “severely impacted” first quarter of 2020.

However, the luxury-goods company said a decline in sales was less than expected. In March, Burberry said that it anticipated a 30% fall in sales for the fourth quarter of the year ended March 31, when in fact sales fell by 27%. Some 60% of its retail stores were closed at the end of that month, it added.

The FTSE-listed company, known for its trademark tartan print, posted a pretax profit of 168.5 million pounds ($205.9 million) compared with GBP440.6 million for the same period a year earlier.

Revenue for the year fell 3.4% to GBP2.63 billion compared with GBP2.72 billion for the same period a year earlier. Most of the group’s losses in February were in Asian markets, it said, noting that trading in mainland China started to improve towards the end of the year and that its EMEIA and Americas markets “also suffered very significant losses in the last three weeks of the year.”

Pretax profit was expected to fall to GBP336.3 million, taken from FactSet and based on the estimates of six analysts, while revenue was anticipated to decrease to GBP2.62 billion, also taken from FactSet and based on 16 analysts’ estimates.

Burberry’s operating profit fell to GBP188.7 million from GBP437.2 million, while its net profit decreased to GBP121.7 million, down from GBP339.1 million.

The board declared a dividend of 11.3 pence a share, down from 42.5 pence a share at the end of the previous year “to protect its future cash position.”

Sabela Ojea

Source:marketwatch.com