Burberry fashions rising profit despite sluggish sales

Sales in China were a bit colourless (AFP Photo/MARK RALSTON)

London (AFP) - Burberry, the luxury British fashion house, announced Thursday a rise in annual net profit on lower restructuring costs -- but its share price frayed on sluggish Asian sales, notably in China.

Profit after tax jumped 15.6 percent to £339.3 million ($437 million, 390 million euros) in the 12 months to the end of March, the company known for its trademark check pattern said in an earnings statement.

Total revenues dipped to £2.72 billion compared with Burberry's 2017/18 financial year.

Chief executive Marco Gobbetti said the latest results showed the group had made "excellent progress in the first year" of a transformation plan.

But sales in key market China delivered only low single-digit percentage growth.

Burberry's share price was down almost four percent at £18.45 in London morning trades, topping the fallers board on the capital's benchmark FTSE 100 index, which was down slightly.

"Today's full-year results from the luxury goods group were seen as disappointing with weaker sales growth, especially in its key growth markets," noted analyst Ian Forrest at trading firm The Share Centre.

Investors shrugged off news of a £150-million share buyback and a dividend increase.

Gobbetti, who took the helm in 2017, is shaking up the brand with a strategy overhaul that aims to add even more luxury to the fashion house's products, which include its famous trench coat.

The fashion house on Thursday noted that it expected a boost from debut collections from new chief creative officer Riccardo Tisci, whose appointment was one of Gobbetti's first moves.

"Riccardo Tisci's first collections arrived in stores at the end of February and the initial reaction from customers is very encouraging," added Gobbetti.

"The implementation of our plan is on track, we are energised by the early results and we confirm our outlook for full-year 2020."

The group aims to achieve £120 million of cost savings in its 2019/2020 fiscal year.