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(Alliance News) - Burberry Group PLC on Wednesday warned trading conditions are likely to remain "challenging" as it reported a sharp decline in annual profit.
Shares in the London-based luxury goods retailer lost 2.0% to 1,164.25 pence in London early Wednesday in response. The FTSE 100 stock is down 54% over the past 12 months.
Burberry said pretax profit plummeted 40% to GBP383 million in the financial year that ended March 30 from GBP634 million the year prior.
Adjusted operating profit fell 34% to GBP418 million from GBP634 million. This was at the bottom end of the range of GBP410 million to GBP460 million given by Burberry in January when it lowered guidance.
Back in November, it had guided for adjusted operating profit towards the lower end of the consensus range at that time of GBP552 million to GBP668 million.
Revenue fell a less severe 3.9% to GBP2.97 billion from GBP3.09 billion a year earlier.
Full-year like-for-like sales were down 1.0%, but had deteriorated as the year progressed. First half growth of 10% was offset by an 8.0% decline in the second half.
In the fourth quarter, like-for-like sales fell 12%, with Asia Pacific down 17% and the Americas down 12%. Mainland China like-for-like sales fell 19% in the fourth quarter.
Burberry left its dividend unchanged at 61.0p per share.
Looking ahead, Burberry said it expects trade in the first half of financial 2025 to "remain challenging".
Burberry said wholesale revenue is estimated to fall by around 25% in the first half as it increases control of distribution.
It expects to see the benefit of the actions it is taking from the second half.
Chief Executive Jonathan Akeroyd said: "While our [financial 2024] 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."
He said executing the plan against a backdrop of slowing luxury demand has been "challenging".
But he remained confident of realising Burberry's potential as the "modern British luxury brand" and in its ability to "successfully navigate this period".
Burberry said it also expects a currency headwind of around GBP30 million to revenue and around GBP20 million to adjusted operating profit in financial 2025.
By Jeremy Cutler, Alliance News reporter
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