Burberry Group retail revenue down 7%

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Burberry Group plc (LON:BRBY) has announced its latest trading update.

“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 £4 billion revenue ambition.”

– Jonathan Akeroyd, Chief Executive Officer

RETAIL REVENUE 13 WEEKS ENDED 30 DECEMBER 2023

	30 December	31 December	% change
£ million	2023	2022	Reported FX	CER*
Retail revenue	706	756	-7%	-2%
Comparable store sales*	-4%	+1%
Contribution from space	+2%

*See page 2 for definition

Comparable store sales by region

Q3 FY24 vs LY	Asia Pacific*	EMEIA	Americas
Comparable store sales	+3%	-5%	-15%

*Asia Pacific consists of: Mainland China +8%, South Asia Pacific +2%, Japan +9%, South Korea -10%

OUTLOOK

We remain confident in our strategy to realise Burberry’s potential as the modern British luxury brand, and we are committed to achieving our £4bn revenue ambition.

The slowdown in luxury demand is having an impact on current trading. In this context, we now expect adjusted operating profit for the financial year ended 30 March 2024 to be in the range of £410m to £460m, below previous guidance.

Based on foreign exchange rates effective as of 29 December 2023, Burberry Group now expect a currency headwind of c.£120m to revenue and c.£60m to adjusted operating profit.

APPENDIX

Based on effective FX rates as of 29 December 2023, in FY24 we now expect a c.£120m headwind from exchange rate movements on revenue and a c.£60m headwind on adjusted operating profit. This compares to guidance given in November for a currency headwind of c.£110m to revenue and c.£60m to adjusted operating profit.

Exchange rates	Forecast effective average rates for FY24		Actual average exchange rates
£1=	29 December 2023	25 October 2023	H1 FY24	H1 FY23	FY23
Euro	1.16	1.15	1.16	1.17	1.16
US Dollar	1.26	1.23	1.26	1.21	1.20
Chinese Renminbi	8.99	8.91	8.97	8.16	8.27
Hong Kong Dollar	9.84	9.65	9.86	9.50	9.43
Korean Won	1,646	1,694	1,654	1,579	1,577

Detailed guidance for FY24

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Item	Financial impact
Impact of retail space on revenues	Space is expected to be broadly stable in FY24.
Wholesale revenue	Wholesale revenue is expected to decline by a high-single digit percentage in FY24.
Tax	We expect the adjusted effective tax rate to be around 29%.
Currency	Based on 29 December effective foreign exchange rates, the impact of year-on-year exchange rate movements is expected to be a c.£120m headwind on revenue and c.£60m headwind on adjusted operating profit.
Capex	Capex is expected to be around £200m including over 50% of the store network updated by end of the year.
Share buyback	£400m share buyback completed on 31 October 2023.