Burberry has swung back to profit after the luxury fashion firm’s bet on Gen Z shoppers and move to revive its British heritage paid off, but it flagged worries over a possible Iran war impact on consumer spending.

The firm reported pre-tax profits of £49 million for the year to March 28 against losses of £66 million the previous year, with results boosted by a better-than-expected 5% jump in same-store sales over its final quarter and an overhaul to cut £100 million in annual costs.

But it said it was “mindful of the uncertain geopolitical and macro-economic environment and its potential impact on consumer confidence”.

Burberry said the Middle East accounts for around 2% of its annual group sales, with the disruption from the conflict contributing to a 2% drop in fourth quarter sales over the wider Europe , Middle East, India and Africa division.

The group said it was not yet seeing the impact extend outside the Middle East.

Joshua Schulman, Burberry’s chief executive, said: “This financial year marks…