Burberry has blamed a slowdown in luxury demand, driven in part by the cost-of-living crisis, as it cuts profit guidance.
In the 13 weeks to 30 December 2023, retail revenue fell by 7% to £706mn. Comparable store sales were also down 4% after falling by 5% and 15% respectively in its EMEA and Americas regions. However, sales in the Asia Pacific region rose by 3%.
As a result, Burberry expects adjusted operating profit for the year to 30 March 2024 to come in at between £410mn and £460mn, compared to the previous guidance of £552mn to £668mn. This is its second profit warning in three months following a weak Christmas trading period
The retailer’s share price slumped 14% in early trading, before partly recovering to be down 6%, making it the top faller on the FTSE 100 on Friday. Shares are down almost 45% over the past year.
Jonathan Akeroyd, chief executive of Burberry, said: “We are continuing to deliver the transition to our new modern British luxury creative expression for Burberry which started appearing in our stores in early autumn. We are still in the early stages of executing on this, which has become more challenging against the backdrop of slowing luxury demand.
“We experienced a further deceleration in our key December trading period and we now expect our full year results to be below our previous guidance. We remain confident in our strategy to realise Burberry’s potential and we are committed to achieving our £4bn revenue ambition.”
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