LONDON – Ongoing, lackluster demand for luxury goods in markets including China and the U.S. dented Burberry’s full year growth in fiscal 2024, with revenue down 4 percent to 2.97 billion pounds, and adjusted operating profit falling 34 percent to 418 million pounds.
At constant exchange revenue was flat, with adjusted operating profit down 25 percent. At 418 million pounds, operating profit was at the lower end of a previously downgraded range announced by Burberry earlier this year.
The news sent the share price down 4 percent to 11.41 pounds at 10:30 a.m. BST.
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The fourth quarter ended March 30 was brutal, with comparable store sales in Mainland China falling 19 percent. Sales from the overall Mainland Chinese consumer group were down 12 percent in the fourth quarter compared with last year.
In the Americas region, comparable store sales fell 12 percent in the year and in the fourth quarter. Burberry said it is continuing to see a “relatively broad-based decline” across its local customer base.
The EMEIA region, which includes Europe, saw strong tourist growth, with comparable store sales up 4 percent in the full year despite a 3 percent decline in the fourth quarter.
Jonathan Akeroyd, Burberry’s chief executive officer, said that executing Burberry’s strategies against a backdrop of slowing demand has been challenging.
“While our full-year 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,” said Akeroyd.
“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 realize Burberry’s potential,” and in its ability to navigate the period, he said.
Burberry emphasized that the first half will remain “challenging,” and that it expects to see the benefit of its strategies coming through in the second half. Wholesale revenue is estimated to fall by around 25 percent in the first half, as the company increases control over distribution.
During a call on Wednesday morning, Akeroyd said April, the first month of the new fiscal year, was challenging, but he was confident that Burberry’s new products, as well as the core, traditional styles, would continue to attract customers old and new.
“We are setting ourselves up for future growth,” Akeroyd said.
He added that more than 50 percent of stores have been refurbished, and the brand was also making a big accessories push. The Knight and the Rocking Horse handbag families will be the focus of a campaign set to be released in the coming weeks.
In the results statement, Burberry said it will continue to balance investment in consumer facing areas with “disciplined cost control” to support its growth ambitions. It is expecting a currency headwind of around 30 million pounds to revenue, and 20 million pounds to adjusted operating profit in fiscal 2025.
Burberry is not alone in suffering from the luxury slowdown. Given the grim macro backdrop, the company warned during a third quarter trading update in January that adjusted operating profit would fall between 410 million pounds and 460 million pounds.
Last November, Burberry had already told markets that its profit would suffer from the slowdown in demand, and the situation worsened as the weeks passed.
Last month, fellow fashion player Kering said it expected operating profit in the first half to plummet by 40 to 45 percent amid a drop in sales at its star brand Gucci, which is undergoing a revamp under CEO Jean-François Palus, deputy CEO Stefano Cantino and creative director Sabato De Sarno.
