Burberry reported full-year adjusted operating profit of £26 million ($35 million), beating low estimates as a turnaround program under new CEO Joshua Schulman progressed faster than markets predicted. Analysts had forecast only £4 million.
Net results swung to a loss of £66 million for the fiscal year through March, compared to £383 million in pre-tax profit the prior year.
The group announced it would cut around 1,700 jobs, mostly in office functions, as well as phasing out the night shift at its Castleford trenchcoat plant.
Still, comparable retail sales for Burberryâs most recent quarter came in slightly ahead of estimates, falling 6 percent compared to a consensus estimate of negative 8 percent according to Bloomberg. Thatâs nearly in line with the 5 percent decline recorded at LVMHâs fashion division, and less than half the drop reported by Kering for the same quarter, suggesting that Burberryâs latest turnaround attempt is gaining some ground with consumers in a tough market for luxury goods.
Last year, Burberry brought on new CEO Schulman, who in November pledged to roll back recent price hikes, cut costs and refocus the brandâs messaging on the core outerwear category. Positive reception to the brandâs âLondon in Loveâ campaign â a star-studded homage to British romantic comedies featuring the tagline âItâs always Burberry weatherâ â suggests the refocused messaging is resonating with customers.
âBurberry has fared better than most luxury peers through this reporting season,â Citi analyst Thomas Chauvet said. âWe expect the market to react positively to resilient retail like-for-likes and a slight second-half EBIT beat.â
Stay tuned to BoF for updates on this developing story.