Burberry Group Plc’s earnings beat estimates as cost-cutting and improving consumer trends in China shored up the U.K. trenchcoat maker’s performance as it prepares for the arrival of a new chief executive officer.
Adjusted pretax profit of 462.4 million pounds ($598.8 million) for the fiscal year ended March 31 exceeded the average analyst estimate of 457.1 million pounds, Burberry said Thursday, sending the shares up as much as 2.4 percent. The earnings were down 21 percent from a year earlier on an underlying basis as the company pumped money into reviving growth in its beauty and wholesale businesses.
Burberry said it’s on track toward a goal of cutting costs by 100 million pounds a year by 2019. Cost reductions were partly offset by falling sales in the Americas, where the company has withdrawn from some retail outlets in non-premium locations and shortened its clearance period in an effort to make the brand more aspirational.
Luxury groups including LVMH and Gucci owner Kering SA have reported faster-than-expected growth in the first quarter amid a global rebound in demand for high-end products. Incoming Burberry CEO Marco Gobbetti will face pressure to secure a larger share of that growth for Burberry when he starts the job in July.
Burberry retail revenues rose 2 percent on a comparable basis in the quarter ended March 31, the London-based company said last month, compared with a 15 percent jump in sales of fashion and leather goods at LVMH.
The U.K. company said accessories outperformed apparel over the fiscal year. In mainland China, sales growth accelerated in the latest quarter, rising to double-digit percentages from single digits earlier in the year, Burberry…