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Burberry bags profit rise ahead of Tisci design era

Reuters  |  LONDON 

By Paul Sandle

LONDON (Reuters) - beat profit forecasts on Wednesday as a strategy to re-energise its luxury brand showed early promise ahead of the arrival of its new

The former star was appointed in March, replacing Burberry's Christopher Bailey, who had turned the into a global brand.

Burberry's is repositioning the quintessentially British house in a higher luxury segment and Tisci's first collection will be shown in September.

"With now on board and a strong leadership team in place, we are excited about the year ahead and remain fully focused on our strategy to deliver long-term sustainable value," Gobbetti said.

reported a 2 percent rise in adjusted operating profit of 467 million pounds for the year to end-March. Its shares, which have risen 18 percent since Tisci was appointed, were trading up 3.5 percent at 1,867 pence at 0816 GMT.

"While the task of transforming is still before us, the first steps we implemented to re-energise our brand are showing promising early signs," Gobbetti added.

The set out a plan in November to catch up with faster growing luxury goods rivals, but he said there would be little, if any, growth in revenue and operating profit until its 2021 financial year as the programme was implemented.

Tisci's designs will be key to Gobbetti's strategy to reinvigorate Burberry, where sales have lagged rivals.

The company reported group revenue of 2.73 billion pounds ($3.7 billion), down 1 percent, although comparable same store sales rose 3 percent, in line with market forecasts.

final runway show, which had a youthful streetwear focus, had been well received, told reporters, with high demand for an edited capsule range of the collection available immediately.

Burberry's new Belt Bags, which retail at 1,590 pounds, were also proving popular, she said.

Gobbetti wants to increase sales of Burberry's leather goods, and the company agreed to take over the Italian that makes the Belt Bag earlier this month.

Burberry said it had traded in line with its guidance since the start of its financial year on April 1.

Analysts were expecting the company to report adjusted operating profit of 453 million pounds, according to a company-provided consensus of 19 forecasts.

($1 = 0.7401 pounds)

(Editing by Kate Holton and Alexander Smith)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, May 16 2018. 14:45 IST