Burberry Sales And Profits Recorded A Decline.

The picture shows a store in Burberry.

According to the world clothing and shoe net, the weakness of the pound can not be saved.

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(LON: BRBY) performance, according to

The 2016/17 financial year's annual earnings data released today show that sales and profits recorded a drop in real exchange rate.

In the 12 months ended March 31st, Burberry sales increased by 10.4% to 2 billion 770 million at fixed exchange rates, down 2% from real exchange rates, and adjusted pre tax profits increased by 10% at fixed exchange rates, while real exchange rates dropped 21% to 462 million pounds, but exceeded analysts' expectations of 447 million pounds.

According to the report, sales of retail channels increased by 16% to 2 billion 130 million pounds on fixed exchange rates, and 1% of the same store sales, accounting for 77% of total sales. If the actual exchange rate was calculated, retail channel sales increased by 3%, while sales of wholesale channels and licensed operating channels decreased 14% and 48% respectively.

What is worth noting is that in the past 10 years, retail channels have become the main sales channel of Burberry, and the sales volume of wholesale channels and franchising channels is decreasing year by year.

The picture shows the main performance data for Burberry2016/17 fiscal year.

The sales channels of Burberry in the last 10 years and the changes in the performance of various category departments

By Sector:

Sales of the core Accessories Department increased by 15% to 1 billion 33 million pounds at fixed exchange rates compared with the previous fiscal year, up 2% from the real exchange rate, accounting for 37% of total sales.

The sales of women's clothing department increased 9% to 791 million pounds compared with the same period, but fell by 4% at actual exchange rates.

Men's clothing sales increased 14% to 624 million pounds compared with the same period last year.

The sales of children's wear department is the most obvious, with a record of 19% to 108 million pounds.

Color department sales fell 9% to 184 million.

The picture shows regional performance data for Burberry 2016/17 fiscal year.

By Region:

Sales in the Asia Pacific region increased by 15% to 1 billion 70 million pounds on fixed exchange rates, up from 90% over the same period, of which 90% came from retail channels. During the period, China's mainland market recorded a high single digit growth rate, and achieved double-digit strong growth in the fourth quarter, while the performance of Hongkong region still fell, but the decline has decreased.

Sales in the EMEIA region, including Europe, the Middle East and Africa, rose by 13% to 991 million pounds at fixed exchange rates, mainly driven by strong growth in the UK region, while sales in the Middle East were affected by a decrease in the number of passenger traffic and continued to decline.

Sales in North America increased by 3% to 680 million pounds at fixed exchange rates compared with the previous fiscal year, but fell by 11% according to the actual exchange rate. The same store sales fell by a low figure in the US retail environment downturn.

As of March 31st, Burberry had a total of 517 retail outlets worldwide, including 469 direct retail outlets, 18 less than last year, 48 franchised stores, and a net reduction of 14, that is, a total reduction of 32 stores.

Christopher Bailey, who is stepping down as Burberry CEO, said that the 2016 fiscal year was a year of change for Burberry. Not only the demand of consumers was changing rapidly, but also the whole luxury retail environment was experiencing greater volatility. He stressed that the decline in performance during the period was mainly affected by the increase in restructuring costs.

In view of the global consumer demand for luxury goods and the reduction in the volume of shopping malls, Christopher Bailey put forward a fiscal tightening plan last May, including streamlining the performance of bad stores, cutting the number of products, reducing SKU by 15% to 20%, and refurbishing its brand stores.

Thanks to Burberry's improvement and upgrading of store services and the implementation of Net Promoter Score (NPS) customer feedback plan, the conversion rate and repurchase rate of consumers have improved in the past year, and sales of private sector sales have soared by 50%, exceeding the expected 20%.

In addition, digitalization is also an important part of the Burberry pformation plan. The electricity supplier business is currently the fastest growing channel for Burberry sales. Therefore, Burberry will continue to improve its own digital platform and pform its fans into the loyal customers through the promotion of shopping experience and the introduction of app.

For the fiscal year 2017/18, Burberry said sales remained unchanged, but the one-time restructuring cost is expected to increase to 40 million.

In order to better control its operating costs, streamline the process and promote teamwork and efficiency, Burberry will shift its 300 positions to Liz's new business center this year, including finance, human resources, procurement and customer service teams.

The plan is part of the streamlining strategy, which Burberry expects to achieve at least 100 million pounds in 2019.

In addition, Burberry decided to focus on the development of make-up business. The company has signed a license agreement with Coty group and decided to hand over the licensing right of brand make-up to Coty group to speed up the expansion of the category business. The agreement will come into effect in October this year.

It is noteworthy that Marco Gobbetti will be the CEO of Burberry from July, and Christopher Bailey will continue to be president and creative director.

Dior Judy Collinson, formerly senior vice president of the US area, has officially replaced Paul Price as the chief sales officer of Burberry in May 8th and is mainly responsible for promoting the implementation of Burberry product strategy.

Some analysts pointed out that Marco Gobbetti took office in July coincided with Britain's 1 years from Europe, and will face greater challenges.

After the release of the earnings report, Burberry announced that it will finish the 300 million share buyback plan this year and repurchase 50 million pounds in 2018.

As of press release, Burberry shares rose 2.2% to 16.77 pounds per share. Over the past year, the stock price grew by more than 50%, and its market value is now about 7 billion 400 million pounds.

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