Burberry cuts guidance, profits to fall by at least 27%

The company now expects adjusted operating profit for the financial year to 30 March 2024 to be between £410m and £460m, after saying just two months ago at its interim results that profits would be towards the low end of the consensus range at the time of £552m to £668m.

Even if Burberry achieves the top end of its new guidance range, that would represent a 27% drop on the £634m adjusted operating profit registered the year before.

Retail revenues were down 7% in the third quarter ended 31 December at £706m, with comparable store sales falling by 4%.

Comparable store sales in Asia Pacific improved by 3% on last year, but fell by 5% in Europe, the Middle East, India and Africa and dropped 15% in the Americas regions.

Meanwhile, foreign exchange is now forecast to have a slightly bigger impact on the top line for the full year, impacting revenues by £120m (up from the £110m guidance in November) while the £60m impact on adjusted operating profit remains unchanged.

In a brief trading update, the company said: "The slowdown in luxury demand is having an impact on current trading."

However, it added: "We remain confident in our strategy to realise Burberry's potential as the modern British luxury brand, and we are committed to achieving our £4bn revenue ambition."