Burberry issued a profit warning on Friday as the worldwide slowdown in luxury demand continues to dent sales.
In an unscheduled trading update, Burberry said it expects adjusted operating profit for the financial year ending March 30 to be 410 million pounds to 460 million pounds below previous guidance.
The company added that, based on foreign exchange rates effective as of Dec. 29, it is also expecting a currency headwind of around 120 million to the full-year revenue figure, and approximately 60 million to adjusted operating profit.
Jonathan Akeroyd, chief executive officer, 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 realize Burberry’s potential,” he said.
Akeroyd added that Burberry is committed to achieving its 4 billion pounds revenue ambition in the medium term.
In the 13 weeks to Dec. 30, Burberry said that retail revenue was down 7 percent at reported rates and down 2 percent at constant exchange to 706 million pounds.
The company had already alerted the markets in November that sales and profits would be at the lower end of its previously stated range.
Burberry had been expecting low-double-digit growth for the full fiscal year, and adjusted operating profit between 552 million pounds to 668 million pounds. Adjusted operating profit could land at the “lower end” of the consensus range, the company said.
“This is a challenging macro environment coming from all regions, and it’s quite unique,” said Burberry’s chief executive officer Jonathan Akeroyd. “Historically, you’d get a softness in one region, and you’d be able” to compensate for it somewhere else.”
SOURCE: Elle
