Burberry recovery weighed down by Iran war impact
Burberry's Financial Performance and Market Challenges
May 14 (Reuters) - Burberry reported higher fourth-quarter sales on Thursday as the British luxury brand's turnaround gathered pace in the U.S. and China, but the Iran war and weaker tourism dented revenue in its core Europe and Middle East region.
Global Luxury Market Outlook
A hit to global travel and surging energy costs have dashed hopes of a recovery for the $400 billion luxury market this year, squeezing profits and deepening a downturn that followed the post-pandemic boom.
Burberry's Regional Sales Performance
Burberry reported comparable retail sales growth of 5% in the three-month period ended March 28, bringing annual growth to 2%, in line with analysts' expectations in a company-compiled poll.
EMEIA Region
But its sales in the Europe, Middle East, India and Africa (EMEIA) region fell 2% in the fourth quarter, while the Americas and Greater China both grew 10% thanks to what the company called "reignited brand momentum".
Leadership and Strategic Initiatives
CEO Joshua Schulman has steered Burberry's recovery since taking over in July 2024, focusing on its signature trench coats and scarves and reinforcing the 170-year-old brand's British heritage with younger shoppers, while cutting costs.
Cost-Cutting Measures
A year after Burberry laid off 1,700 staff - a fifth of its global workforce - in a cost-cutting drive, Schulman said on Thursday that this financial year marked a "meaningful inflection point" as the company returned to profitable sales growth.
Operating Profit Recovery
Operating profit for the year was 115 million pounds, rebounding from a loss of 3 million pounds in the previous year.
Leadership Transition
Burberry also said that Chair Gerry Murphy will be retiring later in the year, and will be succeeded by William Jackson.
(Reporting by Pushkala Aripaka in Bengaluru and Helen Reid in London; Editing by Mrigank Dhaniwala, Sherry Jacob-Phillips and Hugh Lawson)
