LONDON — COVID-19 dragged down sales and profits at Burberry Group in fiscal 2019-20, but the company said Friday it was already seeing a “strong rebound” in some parts of Asia, and its balance sheet was robust enough to push through the difficult times.
Revenue in the 12 months to March 31 was down 3.2 percent to 2.63 billion pounds at constant exchange and fell 4 percent at actual rates. Reported operating profit, calculated with new accounting measures, fell 57 percent to 189 million pounds.
The company declined to offer any outlook for the current year, but it said the first quarter would be badly impacted by store closures.
In March, with the coronavirus crisis in full swing, Burberry said trading had fallen between 40 percent and 50 percent. At the time, the company was expecting comparable retail store sales in the final weeks of the year to be within the range of minus 70 percent to minus 80 percent due to the escalation of governmental regulations; trading, travel and social restrictions.
On Friday, the brand’s chief executive officer Marco Gobbetti was upbeat about Burberry pre-COVID-19 — and post.
“Prior to COVID-19, we were delivering strong momentum across our brand and product, with sales ahead of our expectations. Since then, the global health emergency has had a profound impact on the world, our industry and Burberry, but I am very proud of the way we have responded,” he said.
“We have a strong balance sheet and liquidity, with space for investment when markets recover. We have found new ways to strengthen our connection with consumers, drawing on our digital leadership. We have also mobilized our resources in support of the relief efforts.
“It will take time to heal, but we are encouraged by our strong rebound in some parts of Asia and are well-prepared to navigate through this period. Now, more than ever, our strategy to secure our position in luxury fashion is key. I would like to thank our teams for their dedication and leadership during these challenging times.”
Burberry said it was not in a position to provide specific guidance for fiscal 2020-21 “as it is currently challenging to predict the course of the pandemic and the longer-lasting economic consequences.”
The company said it has 50 percent of its store network closed “and we expect our first quarter, ending June 2020, to be “severely impacted with store closures, likely to be at or near peak for most of the quarter.”
The company said it was leveraging its digital platforms to forge stronger connections with its customers and has mitigation plans to conserve cash and reduce operating costs, while retaining flexibility to respond rapidly and optimize revenues in markets as they start to recover.
The company clarified that in the current year, it adopted a new accounting standard known as IFRS 16, and recognizes operating leases as right-of-use assets and lease liabilities on the balance sheet.