Executive Summary

• Burberry reported a 4% decline in 1H17 total group constant-currency revenue growth to £1,159 million (up 5% in reported currency), below the consensus estimate of £1,165 million. Total results were negatively impacted by weakness in the wholesale and licensing businesses.
• Total retail sales increased 2% year over year at constant currency (down 11% in reported currency) to £859 million. The retail business was driven by strength in the UK. Wholesale sales declined by 14% year over year at constant currency (down 6% at reported currency) to £287 million in FY17.
• 1H17 gross margin contracted by 80 basis points and the SG&A margin increased by 50bps, resulting in operating margin contraction of 120bps. 1H17 adjusted EPS declined by 6.2% year over year, in line with consensus.