Burberry reports jump in annual earnings as sales rebound with profits rising to £523m

Luxury fashion house Burberry has reported a jump in annual earnings as sales rebounded, but said its outlook for the year ahead depends on lockdowns and a recovery in spending across China.

The fashion firm reported underlying operating profits of £523m for the year to April 2, up from £396m the previous year as like-for-like sales jumped 18 per cent.

On a reported basis, pre-tax profits lifted 4 per cent to £511m.

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But the group said comparable store sales growth slowed to 7 per cent in its fourth quarter as Covid lockdowns in China, its biggest market, hit March trading.

Burberry.

The group said: "Our outlook is dependent on the impact of Covid-19 and rate of recovery in consumer spending in mainland China.

"While the current macro-economic environment creates some near-term uncertainty, we are actively managing the headwind from inflation."

The group's results showed that compared with two years ago before the pandemic struck, like-for-like sales were 6 per cent higher thanks to restrictions lifting as economies emerged from the pandemic.

However, China trading has come under pressure in recent months as it has battled to contain a surge in cases of the virus.

Despite this, Burberry still saw comparable store sales jump 50 per cent in mainland China over the full year.

New chief executive Jonathan Akeroyd, who took over at the helm last month after leaving Milan-based Gianni Versace, said: "The company has made great progress over the last five years to elevate the brand, product and customer experience into the luxury space.

"I look forward to setting out my plans for building on these strong foundations and accelerating growth at the interim results in November."

Richard Hunter, head of markets at Interactive Investor, said: “Burberry has had a chequered recent history, partly for reasons out of its control, but these numbers underline the vigorous efforts the company is making to return to former glories.

“The company is committed to maintaining the brand as relevant, appealing and unashamedly high-end.

“Indeed, the decision to exit non-luxury items and discounting is already bearing fruit as the company enters the acceleration phase of its strategy.

“Full-price sales in the US have almost doubled since pre-pandemic and, despite the recent headwinds resulting from lockdowns in mainland China, the region has seen growth of 54 per cent in that period also.

“Overall, comparable full-price retail sales have risen by an impressive 24 per cent.”

Burberry has a site in Castleford and Keighley.