Burberry has seen its retail revenue in Q3 drop by 7%, leading the clothing firm to issue a further profit warning.

The British luxury clothing brand reported in November that its full-year results were at risk, stating that its revenue forecast for low double-digit growth was not looking achievable.

Burberry reported that its adjusted operating profit for the financial year ended 30 March 2024 will now be in the range of £410m to £460m, which is below previous guidance.

Chief executive officer at Burberry, Jonathan Akeroyd, said: “We are continuing to deliver the transition to our new modern British luxury creative expression for Burberry which started appearing in our stores in early Autumn.

"We are still in the early stages of executing on this, which has become more challenging against the backdrop of slowing luxury demand. We experienced a further deceleration in our key December trading period and we now expect our full year results to be below our previous guidance. We remain confident in our strategy to realise Burberry's potential and we are committed to achieving our £4bn revenue ambition."

Reuters reported that shares in the luxury clothing brand dropped by 7.4% earlier today, extending losses over the last year to 44%.

In the 13 weeks to 30 December 2023, retail revenue was down 7% to £706m, with comparable store sales coming in at 4% lower. Sales were up 3% in the Asia Pacific region, which includes mainland China, where sales rose 8%, but down by 5% in Europe.

Investment director at AJ Bell, Russ Mould, added: "So much for the roaring twenties. The idea that wealthier individuals would completely brush off inflation and the cost-of-living crisis has been thrown in the bin. No sector is entirely immune from such pressures and over the past six months or so we’ve seen cracks appearing in the luxury goods sector as demand wanes.

"Burberry already flagged problems two months ago and now it says trading has seen further deceleration, meaning full-year results will miss expectations. The Americas and South Korea are the biggest problem areas for the group, judging by store sales trends.

"Unlike your average fashion retailer, it is simply not the Burberry way to slash prices and hope bargains lure in shoppers. The luxury goods scene is about trying to make consumers want to have something exquisite and premium priced to give the illusion that it is only available to the elite. Discounting would tarnish the brand. Therefore, Burberry has no choice but to ride out the storm until the wealthier are feeling confident enough to splash the cash once more."

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