LONDON, May 15 — Burberry on Wednesday said its annual net profit almost halved and predicted struggles ahead as the luxury fashion sector navigates weak demand, particularly in China since the start of 2024.

Profit after tax stood at £270 million (US$340 million) in the 12 months to the end of March, down 45 per cent compared with its 2022/23 financial year, Burberry said in a statement.

Revenue fell 4 per cent to £2.97 billion, while the group said it expected to face further cost increases.

“Executing our plan against a backdrop of slowing luxury demand has been challenging,” said chief executive Jonathan Akeroyd, adding in the earnings statement that “results underperformed” group expectations.

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Akeroyd voiced confidence in Burberry’s “ability to successfully navigate” a “challenging” first half of its current financial year.

The update comes after Gucci owner Kering in April issued a profit warning, citing a weak Chinese economy.

“Burberry’s latest figures leave a lot to be desired, amid slowing demand for luxury,” noted Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

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“Issues were especially pronounced in mainland China in the fourth quarter, while the Americas saw broad-based declines throughout the year.”

Sales in China slumped 19 per cent in Burberry’s final quarter, or first three months of 2024, but grew 2 per cent over its financial year.

Following the update, shares in Burberry dropped 4 per cent to £11.45. — AFP