Luxury brand Burberry today reported a 12 per cent rise in first-quarter sales but warned of a “material” impact on profits if exchange rates remained at current levels.
To illustrate the issue, Burberry said last year’s retail and wholesaling profits would have been about £55 million lower had current exchange rates been in force, while the adjusted operating margin would have fallen to about 16 per cent, from 17.5 per cent.
The warning came as Burberry said like-for-like sales grew 12 per cent in the three months to 30 June. Taking new selling space into account, total underlying retail revenues rose 17 per cent to £370m.
Chief executive Christopher Bailey said: “With great brand momentum and a focused vision, we remain confident of delivering sustainable, profitable growth into the future.”
Burberry holds its annual meeting tomorrow, where investors are expected to raise concerns over a £20m pay package for Bailey, who succeeded former chief executive Angela Ahrendts when she left in April to join Apple.