Cost controls help Mulberry nudge up profit expectations
LONDON (Reuters) - British handbag maker Mulberry , aiming to recover from an ill-fated push upmarket, said improving retail demand and a tight grip on costs meant full-year profit would be slightly ahead of market expectations.
The company has spent the past year sprucing its ranges and reconnecting with its lower priced roots after a move to a more exclusive luxury position backfired, prompting a string of profit warnings and the exit of Chief Executive Bruno Guillon.
Mulberry said on Thursday its spring/summer collection, which included a strengthened 500-800 pounds ($743-$1,189) bag range, had delivered a much improved sales performance since November, with retail revenue for the year expected to be up 1 percent.
The rise would be more than offset by a sharp decline in wholesale revenue however, meaning group revenue for the year to March 31 would fall 10 percent to 148 million pounds, in line with forecasts.
Mulberry said cost controls would still put profit before exceptional items slightly ahead of market forecasts. According to Reuters data analysts are on average expecting a pretax profit of 4.7 million pounds, down 66 percent on 2013/14.
Last month the firm named Thierry Andretta as its new CEO to work alongside Johnny Coca, another alumnus of fashion brand Céline who is due to become creative director on July 8.
Shares in Mulberry closed at 875 pence on Wednesday, up 23 percent on a year ago, valuing the business at around 523 million pounds.
(Reporting by Neil Maidment; editing by James Davey)
