Burberry Group PLC’s operating profits jump 35% despite ‘ongoing

Burberry Group PLC (LSE:BRBY) said it expects current year profit to grow 35% despite the ongoing challenges faced by retailers.

The luxury fashion clothing brand also cut its estimates for currency headwinds and maintained its medium-term guidance for high single-digit top line growth and “meaningful” margin accretion.

In a third quarter update, like-for-like sales were up 26% on two years ago on the back of ongoing strength in America and a “material improvement” in Asia Pacific and Europe, the Middle East, India, and Africa.

“We are confident of finishing the year strongly and providing an excellent platform on which to build when our new CEO Jonathan Akeroyd joins in April,” said chairman Gerry Murphy.

Strong underlying revenue in the third quarter built on the progress made in the first half, the update said.

Burberry said it developed its social media presence and strengthened its position with new customers, driving double-digit full-price sales growth in all product categories.

The group forecast a £79mln hit from currency fluctuations, down from a previous estimate of £100mln on revenue and £27mln, down from £40mln, on adjusted operating profit.

Burberry said the growth was achieved despite industry-wide challenges.

Retailers have highlighted supply chain issues, labour shortages, coronavirus (COVID-19) and inflation headwinds in recent weeks.

The £150mln share buyback is “well advanced” and is expected to complete before the end of this year.

Shares in Burberry rose 5.61% in morning deals, changing hands at 1785p.