Burberry warns of 'material' FX headwinds this year

16th Apr 2014 07:03

- FX to have material impact on profits this year- Macro environment uncertain, says CEO- H2 revenue up 19 per cent underlyingBurberry has said that current foreign exchange (FX) rates are a 'material headwind' for the high end fashion brand and will have an adverse impact on the bottom line this year. The company said that if FX rates remain at current levels, the full impact on profit from the retail and wholesale divisions in the year ending March 31st 2015 "will be material"."As an indication, rebasing fiscal year 2014 retail/wholesale profit for current exchange rates would reduce reported profit by about £30m," the group said on Wednesday.Chief Executive Angela Ahrendts, who is due to hand over to Creative Director Christopher Bailey later this year, said that "current exchange rates are a material headwind in what remains an uncertain macro environment".Nevertheless, she said that she is "pleased with our second-half performance, [...] underpinned by the planned increase in investment in offline and online retail, innovative customer service and marketing".Revenue in the second half totalled £1,298m, up 19% on an underlying basis which is calculated at constant FX rates. On a reported basis, total sales would have risen by a lesser 16%.Retail revenue rose 13% on an underlying basis to £928m, with comparable sales growth of 12% in line with Burberry's expectations.Wholesale revenue excluding the newly created beauty division rose 11% on underlying basis to £240m, which was ahead of guidance for "high single-digit percentage" growth due to the rephrasing of deliveries and re-orders.BC