Burberry has dropped its full-year profit guidance after it reported that sales in the run-up to Christmas were hit by waning demand for luxury.
The luxury fashion label saw sales drop 7% year on year to £706m for the 13 weeks ending December 30 and warned that its adjusted operating profit for the financial year ending in March 2024 would be between £410m and £460m – below previous guidance.
However, the retailer said it was confident its projected revenue ambition of £4bn would remain the same.
Burberry said profits were also expected to be hit by a £120m currency headwind impacting revenue and affecting profits by £60m, based on foreign exchange rates at the end of December.
Burberry chief executive Jonathan Akeroyd 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 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 realise Burberry’s potential and we are committed to achieving our £4bn revenue ambition.”