PARIS (Reuters) – British luxury brand Burberry on Thursday warned that if exchange rates remained at current levels, that would have a “material impact on profits” as it posted a 12 percent rise in like-for-like retail sales for its fiscal first quarter to June 30.
As an indication, Burberry said for the current year’s retail and wholesale profit, effective exchange rates would now reduce reported profit by about £55 million and adjusted operating margin to around 16 percent from 17.5 percent.
The British label added that it expected broadly unchanged revenue at constant exchange rates in both Japan and global product licences but it expected reported licensing revenue for this year would be reduced by about £10 million, given the movement in the sterling/yen rate.
It said that it expected wholesale revenue at constant exchange rates to remain broadly unchanged in its first half to Sept. 30 but revenue from beauty would grow by about 25 percent at constant exchange rates in its current fiscal year.
(Reporting by Astrid Wendlandt; editing by Jason Neely)
Burberry warns foreign exchange rates to impact profits
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