Proactive Investors - Burberry Group PLC (LON:BRBY) reported profits down by more than a third as the UK fashion house says the "backdrop of slowing luxury demand has been challenging" and is expected to remain so in the coming months.
Revenues came to £2.97 billion for the year to 31 March, down 4% but flat if exchange rate effects are ignored and in line with analyst forecasts.
Retail comparable store sales were down 1%, which was worse than the 0.8% decline that City analysts expected after a 12% decline in the fourth quarter, with mainland China down 19% and the Americas 12%.
Adjusted operating profit fell 34% to £418 million but with margins of 14.1% higher than analyst estimate of 13.9%.
As well as the £400 million share buyback completed in the year, a full year dividend of 61.0p has been proposed.
The outlook, where management points to "a still uncertain external environment", the first half of the new financial year is expected to remain challenging.
Wholesale revenue is estimated to fall by around 25% in the first half as the FTSE 100 group increases its control of distribution.
Profits for the year to March 2025 will reflect a "balance of investment in consumer facing areas with disciplined cost control to support our growth ambition" along with cost savings designed to offset the impact of inflation in the second half, though no more detail on these is given.
Chief executive Jonathan Akeroyd said the board remained "confident in our strategy to realise Burberry's potential as the Modern British Luxury brand and in our ability to successfully navigate this period", saying the financial results underperformed original expectations but "we have made good progress refocusing our brand image, evolving our product and strengthening distribution while delivering operational improvements".