LONDON (Reuters) – British luxury fashion brand Burberry lowered its full-year profit forecast on Friday for the second time in three months, blaming slowing global demand in the run-up to Christmas, which caused its price to plunge on the London Stock Exchange.
At 10:15 GMT, Burberry shares fell 7.68%, bringing the decline suffered over the past year to 44%.
In its wake, competitors LVMH and Kering fell by 0.77% and 1.26% respectively after having lost more than 3%.
Burberry’s latest profit warning is a blow to chief executive Jonathan Akeroyd’s turnaround plan, which is trying to move upmarket under the creative direction of designer Daniel Lee, who launched his first collection last September.
After suffering a deceleration in sales during the key December period, Burberry now expects adjusted operating profit for its full fiscal year to be between 410 million pounds (477 million euros) and 460 million pounds.
In November, the company said adjusted operating profit would be at the low end of analysts’ forecasts at the time, of between 552 million pounds and 668 million pounds.
LVMH and Kering also reported falling demand for high-end products in key markets.
The conflict in the Middle East has added geopolitical uncertainty to the luxury industry’s outlook already clouded by inflation and weaker buyer demand in the United States and Europe, while expectations of a strong post- pandemic in China were disrupted by a serious real estate crisis.
Burberry’s retail turnover in the 13 weeks to December 30 fell 7% to £706 million and same-store sales fell 4%.
They rose 3% in the Asia-Pacific region, which includes China, but fell 5% in Europe and 15% in the Americas.
“The cracks appearing in the demand for luxury goods are very telling. So-called ‘aspirational’ buyers are one of the demographic groups that are retrenching, and Burberry is more exposed to these types of customers than to high-end luxury goods. of the range”, observes Sophie Lund-Yates, analyst at Hargreaves Lansdown.
(Reporting by James Davey and Suban Abdulla; French version by Stéphanie Hamel, edited by Blandine Hénault)
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