Luxury fashion house Burberry (LSE: BRBY) sent its share price tumbling over 7% on Friday after warning investors that full-year profits will likely fall short of expectations.
The company blamed a recent slowdown in luxury retail demand, including a “further deceleration” in the key December trading period.
In a trading update, Burberry said retail revenues declined 6.6% to £706 million in the 13 weeks to 30 December compared to the same period last year. As a result, the company now expects adjusted operating profit for the year ending 30 March to range between £410-460 million – a decrease of up to a third from the £634 million achieved last year.
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Chief Executive Jonathan Akeroyd admitted the company’s transition to a “modern British luxury creative expression” has proven “more challenging against the backdrop of slowing luxury demand.” But he remained confident in Burberry’s long-term strategy. Over the past year, Burberry shares have tumbled 44%.
