Burberry has underperformed financially as it struggled with tepid demand for luxury clothing and accessories, and warns of more pressure to come.
The luxury fashion retailer saw revenues drop 4% to £2.9bn for the 52 weeks ending March 30, 2024, while pre-tax profits dived 40% to £383m.
Burberry’s adjusted operating profit, its preferred profit measure, fell 25% to £418m during the period.
The retailer warned markets that its wholesale revenue was expected to fall by around 25%, while a currency headwind could cost revenue £30m and hit operating profit by £20m in FY25.
In order to navigate another challenging year, Burberry told investors it would continue with “disciplined cost control” and that it had identified cost savings to offset the impact of inflation in the second half of this year.
Despite underperforming financially, the retailer said it had made progress on a project to refocus its image, and had seen double-digit growth in elite customer numbers and spend.
Burberry CEO Jonathan Akeroyd said: “Executing our plan against a backdrop of slowing luxury demand has been challenging.”
“While our FY24 financial results underperformed our original expectations, we have made good progress refocusing our brand image, evolving our product and strengthening distribution while delivering operational improvements.
“We are using what we have learned over the past year to fine-tune our approach, while adapting to the external environment. We remain confident in our strategy to realise Burberry’s potential as the Modern British Luxury brand and in our ability to successfully navigate this period.”
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