The British fashion group Burberry Group Plc significantly lowered its profit forecast for the current 2023/24 financial year on Friday.
In an interim statement, the company justified the more pessimistic outlook with the unsatisfactory sales development in the third quarter. “The slowdown in demand for luxury goods is impacting our current business,” Burberry admitted.
In the 13 weeks before December 30th, the group’s retail sales amounted to 706 million British pounds (821 million euros). This corresponded to a decrease of seven percent (-2 percent adjusted for currency effects) compared to the same quarter of the previous year. Like-for-like retail sales fell by four percent.
In Asia, the company was able to increase its like-for-like retail sales by three percent, not least thanks to solid growth in mainland China (+10 percent). However, this was not enough to compensate for losses in the Americas (-15 percent) and in the EMEA region (-5 percent).
In view of the sobering sales development, management reduced its earnings target for the financial year that ends on March 30th. It now expects an operating profit adjusted for special items in the range of 410 to 460 million British pounds (477 to 535 million euros). In mid-November, the group was still expecting a result “at the lower end” of the original forecast range of 552 to 668 million British pounds.