Burberry, the luxury fashion group, has issued a warning about potential failure to meet its annual full-year revenue targets if the recent global slowdown in demand persists. In the second quarter, the brand's like-for-like (LFL) sales growth plummeted to just 1per cent, a significant decline from the robust 18 per cent recorded in the first three months, with slowing growth observed in all regions.
Asia Pacific experienced a substantial downturn in LFL growth, dropping from 36 per cent in the first quarter to 2 per cent in the second. The Americas also witnessed a worsening situation, with growth declining from -8 to -10 per cent, while in Europe, the Middle East, India, and Africa, LFL growth steeped from 17 to 10 per cent.
For the overall group, LFLs registered at 10 per cent during the six months ending in September. Revenues grew by 4 per cent to just under £1.4 billion, but operating profits declined by 15 per cent to £223 million.
If the current market challenges persist, the group anticipates adjusted operating profit to decline to nearly £552 million instead of the previously expected top-end figure of £668 million.
Furthermore, Burberry expects a currency headwind of £110 million to revenue and approximately £60 million to adjusted operating profit, though this is less than the previously guided amount.