Burberry Share Price Dropped 8.2% After Its H1 Profits Declined

The Burberry Group plc (LON: BRBY) share price dropped 8.2% after releasing its half-year results for the 26 weeks ended 30 September 2023. The fashion company generated £1,396 million in revenues, marking a 7% decline in constant currency compared to the £1,345 million generated in the previous year.

The British luxury fashion house revealed that its retail comparable store sales were up 10% compared to 5% in a similar period last year. The company revealed its adjusted operating profit of £223 million, marking a 6% decline from the previous figure of £238 million. 

Burberry's second-quarter results show a 1% increase in comparable store sales, with varying performance across regions: EMEIA saw a robust 10% growth, Asia Pacific recorded a 2% increase, and the Americas experienced a 10% decline.

Outerwear comparable store sales exhibited strong growth, with a 21% increase in H1 and a 10% rise in Q2. Leather goods also saw positive results, with an 8% increase in H1 and a 3% increase in Q2.

Burberry has focused on achieving a more coherent brand aesthetic with campaigns that significantly improve brand clarity. Impactful activations have supported these efforts. The Winter 23 collection was also launched, expanding distribution and enhancing store visibility compared to previous seasons. 

The company has continued to invest in distribution, opening or refurbishing 33 stores during the year's first half. The website has also been refreshed per Burberry's new creative vision.

However, Burberry acknowledges the impact of the global slowdown in luxury demand on its current trading. If this weaker demand persists, it may not achieve the previously stated revenue guidance for FY24. In this scenario, the adjusted operating profit is expected towards the lower end of the current consensus range (£552m-£668m). 

Jonathan Akeroyd, Burberry’s Chief Executive Officer, 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 a modern British luxury brand, and we remain committed to achieving our medium and long-term targets.”

Burberry share price. 

The Burberry share price fell 8.19% to trade at 1596.8p from Wednesday’s closing price of 1739.3p.