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Nov. 14, 2019, 2:35 a.m. EST

Burberry profit and revenue up, but warns of hit from Hong Kong unrest

Cuts gross margin view to fiscal 2020

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By Cristina Roca


Getty Images
Shoppers walk past a Burberry store on New Bond Street on December 18, 2018 in London, England.

Burberry Group PLC on Thursday reported higher pretax profit and revenue for its first fiscal half, but struck a cautious tone for the rest of the year, warning that Hong Kong protests should continue to drag its performance.

The British luxury-goods company /zigman2/quotes/205386705/delayed UK:BRBY +2.44%  posted pretax profit of 193 million British pounds ($247.9 million) for the period, up from GBP174 million the year previous and beating expectations of GBP174 million, according to a consensus estimate by four analysts provided by FactSet.

The luxury label, known for its iconic tartan print, said revenue rose 5% to GBP1.28 billion, slightly better than a 1.26 billion pound consensus estimate by six analysts provided by FactSet.

At constant exchange rates, sales rose 3%, Burberry said. Retail comparable store sales rose 4% for the first half ended Sept. 28, growing by 4% in the first quarter and 5% in the second quarter, Burberry said. This metric is closely watched by investors for signs of improving momentum at the brand, which is in the middle of executing a turnaround plan.

Burberry said its revenue was dragged by a double-digit drop in revenue in Hong Kong, where protests hurt sales.

The company cut its gross margin view to fiscal 2020, saying it now expects a 150-basis-point decline, from a 100-basis-point decline previously, as it continues to see disruptions in the higher-margin Hong Kong market.

Burberry backed its fiscal 2020 targets of stable revenue and adjusted operating margin at constant exchange rates.

© 2019 - DowJones Newswire

/zigman2/quotes/205386705/delayed
UK : U.K.: London
2,100.00 p
+50.00 +2.44%
Volume: 1.11M
Dec. 6, 2019 4:35p
P/E Ratio
24.26
Dividend Yield
2.04%
Market Cap
£8.35 billion
Rev. per Employee
N/A
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