Burberry warns foreign exchange rates could hit profits

Burberry said if exchange rates remain at current levels “the full impact on reported retail/wholesale profit in FY 2015 will be material”.

The warning comes as like-for-likes increased 12% in the three months to June 30. Retail revenue jumped 17% to £370m. At reported currency levels, this represented a 9% sales rise.

Burberry said the performance was in line with its expectations, and was “driven by planned investment”.

The retailer reported double digit growth in its Asia Pacific and Americas regions. In its Europe, Middle East, India and Africa (EMEIA) division Burberry recorded low single digit growth.

Burberry said it generated double-digit growth across all three main product categories and that digital “continued to outperform in all regions”.

It opened four mainline stores in the period; one in Edinburgh and three airport stores in London Heathrow, Madrid and Milan.  It also closed three shops.

Burberry chief executive Christopher Bailey said: “This first quarter performance reflects our focus on striving to give customers the best possible experience of the Burberry brand through ongoing investment in retail, digital and service, both on and offline.  The 12% increase in comparable sales demonstrates our teams’ success in unlocking the benefits of these investments, as we continue to concentrate on the things we can control in an uncertain external environment.

“As we build on this strong start to the year, our priority remains to connect consumers ever closer to Burberry through authentic products and experiences that celebrate our unique heritage.  With great brand momentum and a focused vision, we remain confident of delivering sustainable, profitable growth into the future.”

Burberry holds its AGM on Friday, where the brand is expected to have to defend Bailey’s £20m pay package, which some shareholders have expressed concern over.