Half-year profits fell by more than a third at Burberry Group PLC (LON:BRBY) but the second quarter saw an improvement in like-for-like sales.
Reported profit before tax fell 34% to £102mln in the six months to the end of September on the back of a 4% underlying (forex-adjusted) fall in revenue to £1,159mln.
Adjusted profit before tax was down 24% on a constant currency basis and down 4% using actual exchange rates to £102mln.
Encouragingly, like-for-like (LFL) sales rose 2% year-on-year in the second quarter, marking a significant improvement on the first quarter, when they fell 3%.
The interim dividend has been hiked 3% to 10.5p.
The luxury goods firm said its digital offering continued to outperform in the half year, with growth in the Americas, Asia-Pacific, and Europe, Middle East, India & Africa (EMEIA) regions.
Digital traffic increased year-on-year, with mobile accounting for over 50% of the mix and conversion improved in both channels (retail/wholesale and licensing).
Third party digital revenue grew strongly and, at retail value, is now more than half the size of Burberry’s in-house digital revenues.
Christopher Bailey, Burberry’s chief creative and chief executive officer, said the group remained on track to achieve its financial goals.
"In May we outlined plans to evolve how we work as a business and to drive Burberry's future growth in a rapidly-changing luxury environment. Since then, we have made good early progress towards realising the significant opportunities ahead of us, as we begin implementing our five strategies,” Bailey said.
Liberum Capital Markets noted the strong tailwinds the company had enjoyed from the strength of the dollar, but with the greenback tanking after Trump’s victory in the Presidential election, these tailwinds could blow out very quickly.
“This [forex boost] has been masking difficult underlying trading conditions. They could now be unmasked. We believe new management (CEO due to start in mid-2017) brings risk of downgraded guidance.
“Fundamentally we believe that Burberry has too many stores and will see scant underlying growth over the next three years,” Liberum said, as it reiterated its ‘sell’ recommendation.
Shares were off 2.2% at 1,448p in early deals.