Burberry Group Plc issued an early profit warning on Friday as a holiday slump in luxury sales put a damper on the British brand’s anticipated bottom line, according to a press release.
For the financial year ended March 30, 2024, Burberry said it now expects its adjusted operating profit to be approximately 410 million pounds to 460 million pounds, or about $524 million to $588 million. Those estimates fall below the company’s previous guidance of 552 million pounds to 668 million pounds issued during its November earnings.
“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,” Jonathan Akeroyd, CEO, said in the release. “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.”
The company is still committed to hitting its 4 billion pound revenue ambitions, Akeroyd said.
For the 13 weeks ended Dec. 30, 2023, total retail revenue was 706 million pounds compared to 756 million pounds for the same period in 2022, per the release. Comparable store sales in the Americas were down 15%, and down 10% and 5% in South Korea and EMEIA, respectively.
The revised guidance comes ahead of the company’s planned Q3 trading update, scheduled for Jan. 19. In its November H1 earnings, the company reported an 18% profit dip amid an overall slowdown in the luxury sector.
At that time, the company said that decreased luxury demand globally was “having an impact on current trading” and cautioned that “if the weaker demand continues, we are unlikely to achieve our previously stated revenue guidance for FY24.”
