Companies

Burberry warns on profits as luxury demand slows

Jan 17, 2024 United Kingdom

The British luxury group has once again cut its profit guidance for fiscal 2024, following a period of weak sales in December. It also warned of tough times ahead for the luxury sector as demand wanes

“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”, commented Jonathan Akeroyd, Chief Executive Officer of Burberry.

Trading Update

In the thirteen weeks to the 30^thof December, the company’s retail revenue amounted to 706 million British pounds (821.5 million euros), reflecting a decrease of 7%, or 2% at current exchange rates, as compared to the same period of last fiscal year.

Burberry also reported that in the third quarter of the current financial year, comparable store sales increased by 3% in Asia Pacific, but decreased by 5% in EMEIA and 15% in the Americas, on a comparable basis to the same quarter of fiscal 2023.

Acknowledging the impact of the slowdown in luxury demand on trading, the luxury group downgraded once again its profit guidance for the year that will end on the 30^th of March. It now expects its full year adjusted operating to be in the range of 410 to 460 million British pounds (477.1 to 535.2 million euros), below the previous guidance of the end of the lower of 552 to 668 million British pounds (642.3 to 777.2 million euros).

Akeroyd added, however, that Burberry remains “committed to achieving our £4 billion (4.65 million euros) revenue ambition”.

1 British pound = 1.16 euros

Image Credits: designscene.net

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