Burberry has reported that its full-year sales expectations are at risk, as a result of a slump in demand around the world.

The luxury fashion brand said its annual revenue forecast for low double-digit growth was not looking achievable.

In the six months to the end of September, Burberry recorded revenue growth of 4% compared to the same period in 2022, now standing at almost £1.4bn.

Although like-for-like sales were up by 10% in this period, these sales only increased by 1% in the second quarter. Burberry has said that this is a result of a sharp slowdown in China, where consumer confidence has fallen off.

The firm has also stated that there are no signs of a recovery in its largest growth market, as the country has dropped back into deflation.

Rising living costs across the globe have also had an effect on the fashion brand.

Chief executive officer at Burberry, Jonathan Akeroyd, said: "We made good progress against our strategic goals, executing our priorities at pace. We continued to build momentum around our new creative vision with the launch of our Winter 23 collection in September, the first designed by Daniel Lee.

"While the macroeconomic environment has become more challenging recently, we are confident in our strategy to realise our potential as the modern British luxury brand, and we remain committed to achieving our medium and long-term targets."

Lead equity analyst at Hargreaves Lansdown, Sophie Lund-Yates, added: "The shine is dimming on the luxury sector as even higher end consumers tighten their belts. Heralded as a more resilient corner of the economy, suggestions of missing targets and lower-end profits aren’t what investors have come to expect and that has consequences for valuations.

"Specifically for Burberry, it doesn’t have a basket of other brands or products to help diversify risk in this scenario. The work the group’s done to become a more premium luxury house is to be commended and will improve strength in the long-term, but there’s no getting away from the fact that particularly aspirational, younger shoppers are thinking twice before swiping their cards. There could be further pressure to come before things improve, especially if a broader pull back in spending comes through in 2024 after the glut of festive trading.

"Burberry has done pretty much all it can to place itself in a better position, both operationally and creatively. The issue is that while it’s a slicker and bolder beast, Burberry is currently residing in a hostile environment outside of its control."

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