London (AFP) – British fashion label Burberry said Thursday that it returned to profit in its latest fiscal year thanks to a sizeable cost-cutting plan launched at the end of 2024. Net profit stood at £21 million ($28 million) in the year to the end of March, compared with an after-tax loss of £75 million a year earlier, Burberry said in a statement. Revenue, however, dipped two percent to £2.4 billion, and the company’s shares fell in early deals on the London stock exchange.
“This financial year marks a meaningful inflection point for Burberry,” chief executive Joshua Schulman said. “Our strategy is working and there are clear opportunities for further growth.” In its guidance for the year ahead, the company said it was “mindful of the uncertain geopolitical and macroeconomic environment and its potential impact on consumer confidence.”
Burberry embarked on a turnaround plan in 2024 aiming to boost sales and cut costs as the global luxury sector suffered from weak demand in China. Under Schulman, Burberry has refocused on its staple outerwear, including its famed trench coats, in a bid to improve its fortunes. Schulman was appointed chief executive in July 2024 after former CEO Jonathan Akeroyd left the group following weak results that some investors blamed in part on poor strategy.
Comparable store sales grew two percent in the full year, lifted by sales in its key China market and in the Americas. “Progress is being achieved by measures on any number of fronts, including the attraction of Gen Z customers despite intense competition,” said Richard Hunter, head of markets at Interactive Investor. But shares in the company fell around three percent on London’s top-tier FTSE 100 index, which was trading slightly higher overall.
“There remains…a mountain to climb, such that investors are ready to accept but are not yet fully convinced of a sustained recovery,” Hunter said. Burberry said Thursday that its chairman, Gerry Murphy, will retire in November and be succeeded by William Jackson, founder of the private equity firm Bridgepoint Group.
© 2024 AFP
