© Reuters. The logo of Burberry outlet store is seen in Paris

By Paul Sandle

LONDON (Reuters) – New Burberry designer Riccardo Tisci’s ranges have been enthusiastically received by customers, but their arrival in store came too late to prevent the British luxury goods group from missing annual profit expectations, it said on Thursday.

The 163-year-old company, famous for its trenchcoats and check pattern, reported a 6% drop in adjusted operating profit to 438 million pounds for the year ended March 30, hit by foreign exchange movements and investment in new products. Analysts had expected 442 million pounds.

Its shares fell 4.3% in early trade, the biggest drop on the .

Credit Suisse (SIX:) analysts said fourth quarter like-for-like sales growth of 1% was below the consensus forecast of 2%, but welcomed a reiteration of sales and profit guidance for the current financial year.

“The soft performance in 4Q should not be representative of the performance of the new creative direction taken by Riccardo Tisci as it accounted for only 10-15% of the total assortment in March,” they said.

Burberry’s Chief Financial Officer Julie Brown said Tisci’s designs had been very well received, and his runway collection and summer range achieved strong double-digit growth in the last weeks of the financial year.

Burberry reported full-year revenue of 2.72 billion pounds, down 1% at constant exchange rates, while adjusted operating profit was flat on the same basis.

“The implementation of our plan is on track, we are energised by the early results and we confirm our outlook for FY (fiscal year) 2020,” Chief Executive Marco Gobbetti said.

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The company is rationalising its distribution in the United States to ensure the brand is in the right stores, hitting its financial results in the short term.

But it expects growth to be re-established in the second half as Tisci’s collections build through the year.

Burberry said its revenue and adjusted operating margin would be broadly stable at constant exchange rates this financial year, and there would be a more pronounced weighting of operating profit to the second half versus the first.

The company increased its full-year dividend by 3% to 42.5 pence a share and announced a 150 million pound share buyback.

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