Burberry posts drop in H2 revenue despite 'exceptional' UK performance

Luxury fashion brand Burberry reported a drop in total underlying revenue in the second half as an "exceptional" performance in the UK was offset by efforts to improve brand positioning in the US and in the beauty business.

For the six months to the end of March, total revenue was down 1% on an underlying basis to £1.61bn, but up 14% at reported currency.

Meanwhile, retail revenue was up 3% on an underlying basis to £1.27bn, but up 19% at reported FX, with comparable sales up 3%.

The group said growth in the US declined due to the stronger dollar and as it took strategic actions to "protect brand positioning in the highly promotional US environment".

The company said it saw a continued exceptional performance in the UK, while Continental Europe improved through the half, especially France, but the Middle East remained challenging.

Burberry saw low single-digit sales growth in Asia Pacific. Mainland China delivered high single-digit percentage growth, accelerating through the half, but Hong Kong sales fell, experiencing negative footfall that was only partially offset by improved conversion.

In Korea, its third largest market in Asia, sales were hit by both the macro environment and the company's own actions to reduce promotional activity.

Chief creative and executive officer Christopher Bailey said: "In an uncertain environment, we continue to take action to strengthen the brand and reposition Burberry for growth. The outperformance of fashion and the strong customer response to new products underline our renewed creative momentum."

Burberry said there was no change to its expectations for full-year 2017 adjusted pre-tax profit.