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The normalization of luxury has not spared Burberry<\/strong>. The British house of luxury clothing, accessories and fragrances announced this Wednesday a significant drop (-34%) in its annual operating profit for the 2023-2024 financial year<\/strong>. In turn, the fashion brand’s pre-tax profit fell by 40% to \u00a3383 million for the year ending March 30, 2024.<\/p>\n <\/p>\n “Implementing our “move upmarket” plan against a backdrop of slowing demand for luxury has been challenging,”<\/em> admits CEO Jonathan Akeroyd<\/strong>.<\/p>\n <\/p>\n Same-store sales fell by 12%<\/strong> in the final quarter, wiping out the gains made earlier in the year. Over the full year, overall sales fell by 4%<\/strong> to \u00a32.97 billion (\u20ac3.46 billion<\/strong>).<\/p>\n <\/p>\n Net profit, Group share, fell by 45%<\/strong> to \u00a3270 million (314 million euros<\/strong>). This disappointing performance led to a 4%<\/strong> fall in the share price at the opening of trading in London on Wednesday, and a 19%<\/strong> drop since the start of the year.<\/p>\n <\/p>\n Jonathan Akeroyd admitted that the results were below initial expectations, but highlighted the progress made in refocusing the brand.<\/p>\n <\/p>\n “We are using what we have learned over the past year to refine our approach, while adapting to the external environment,”<\/em> he said. The CEO remains confident that Burberry will become the brand of “modern British luxury”.<\/p>\n <\/p>\n <\/p>\n The luxury fashion house suffered a 12%<\/strong> drop in store sales in US markets<\/strong>, where it continues to see “a relatively widespread decline”<\/em> in retail customers.<\/p>\n <\/p>\n In-store sales in Europe, the Middle East and Africa<\/strong> rose by 4%<\/strong> over the fiscal year, but fell by 3%<\/strong> in the first three months of 2024. This region initially benefited from growth in tourism, but then faced pressure on local consumer spending, which posted a double-digit fall in the fourth quarter.<\/p>\n <\/p>\n In addition, strong sales in Asia<\/strong> at the start of the year were offset by a 17%<\/strong> drop in the fourth quarter, due to weakening demand in mainland China<\/strong>.<\/p>\n <\/p>\nRegional problems<\/h2>\n
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