The biggest luxury-goods manufacturer on the territory of the U.K. – Burberry Group Plc made an official statement today, disclosing a second-half revenue that was largely in line with analysts estimates. The company also revealed that its growth was benefited by online expansion, but also shared its concern about its profit in fiscal 2015, which is expected to be affected by currency movements.
In January this year the company shared its forecast, saying that it is seeking a “modest increase” in full-year retail and wholesale operating margin. This target was not repeated in todays statement. The Chief Financial Officer of Burberry refused to make any comments on the companys profitability and as reported by Bloomberg, said that “theres nothing in the statement thats new news”.
Ms. Angela Ahrendts, who is the Chief Executive Officer of the company said in the statement, which was cited by the Wall Street Journal: “While current exchange rates are a material headwind in what remains an uncertain macro environment, our continued global brand momentum provides an excellent foundation for the future.”
According to the companys statement, Burberry Group Plcs retail revenue increased by 13% at constant exchange rates in the six months through March 31st 2014 and reached 928 million pounds (1.6 billion dollars), trailing analysts estimates of 931 million pounds. Burberry also revealed that its sales at the stores, which the company founded at least a year ago, jumped by 12%.
This week the company opened a flagship store in Shanghai in an attempt to expand its reach in China. Burberry Group Plc is trying to make its brand more attractive for travelling Chinese customers. The CFO of the company – Ms. Carol Fairweather – said for the Financial Times: “Its all the investment weve put into China that is enabling this outperformance.”
As reported by Bloomberg, Ms. Fairweather also said on a telephone call” “Sterling has appreciated quite significantly against some of our major currencies. However, this in no way reduces our confidence in the underlying business.”
Burberry Group Plc traded at 1 459 pence per share by 14:38 GMT, adding 2.6% for the day and capping a one-year change of +15.24% up. The 22 analysts offering 12-month price targets for Burberry Group Plc have a median target of 1,605, with a high estimate of 2,225 and a low estimate of 1,400. The median estimate represents a 12.87% increase from the last price of 1,422.
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