Christopher Bailey claimed the cost cutting measures Burberry Group PLC (LON:BRBY) introduced last year were starting to have an impact even though profits fell.
Bailey hands over the CEO reins to Marco Gobbetti in July after a troubled stint in charge of luxury fashion retailer and the results reflected the problems.
Underlying profits dropped by 21%, which Burberry blamed on restructuring costs, lower wholesale income (down 14%) , particularly in the US and the Beauty arm, and a 48% reduction in licensing income.
Stated profits fell 5% to £395mln with revenues 2% down at £2.77bn as currencies had a major impact.
Cost savings delivered £20mln in 2017, which will rise to £50mln in the current year and at least £100m annualised in 2019.
Cash rose by £149mln to £809mln even after £97mln of share buy buyback and £164mln of dividends. The full year dividend rose by 5% to 38.9p.
Danny Cox, at wealth manager Hargreaves Lansdown, said: “The underlying picture is that both sales and profits were down significantly, as weakness in key markets put margins under pressure.”
“But the message from the company is that finally, their efforts to steady the ship and turn her around are starting to pay off.
“Costs are being cut, with £20mln off the cost base last year and another £50mln to come in the current year, including a move of some admin roles to Leeds.”