Burberry has released its first financial filing since creative director Christopher Bailey replaced Angela Ahrendts as CEO. The report, which covers the 2013-2014 fiscal year, still falls under Ahrendts's tenure (and the six-month transition period), and underscores what big shoes Bailey— who presented the results to investors Wednesday—has to fill.
Revenue went up 17 percent to £2.33 billion and adjusted pre-tax profits were up 8 percent to £461 million, beating analysts' estimates. CEO changes aside, it's been a transformative year for Burberry: The brand expanded its presence in China, dipped its toe a bit further into the Japanese market and invested heavily in the beauty business, which it shifted from licensing to direct operation.
“Burberry delivered record sales and profit in 2013/14. The strength of this performance reflects sustained strategic focus, continued investment, disciplined execution and outstanding brand momentum during the year," said Bailey in his first official statement as CEO. "As we enter a new chapter, our teams are united and energised by the opportunities ahead - from unlocking Japan, to accelerating Beauty and further integrating the physical and digital to deliver distinctive experiences. While mindful of macroeconomic uncertainties and currency headwinds, we remain focused on the things we can control and confident of driving sustainable future growth, benefiting all our stakeholders.”
The company also outlined its plan for future growth, which basically entails finishing what it started in 2013. Specifically, Burberry has big ideas for beauty, including the growth of the sector by 25 percent in the 2015 fiscal year -- and in particular, its "fragrance pillar," Brit Rhythm, of which it will soon launch extensions.
In addition, the brand will build out makeup, skincare and its Burberry Beauty Box retail concept. Going forward, Burberry plans to increase efforts to sell beauty directly to consumers, as it's primarily only sold through wholesale -- in addition to using third-party e-tailers like Amazon to build its fragrance business. Probably a pretty smart move.