Burberry is projected to unveil its weakest financial performance of the year in the upcoming fiscal fourth quarter, as demand softens in critical markets like China and the U.S., according to analysts surveyed by Bloomberg.
The luxury brand’s shares dipped in January following a downward adjustment of expectations, stemming from a profit warning issued in November, signaling a sustained deceleration in luxury spending. Analysts expressed skepticism about Burberry’s ability to rejuvenate its brand identity in the coming fiscal year, citing ongoing market challenges. Deutsche Bank’s Adam Cochrane notes that the brand’s sales decline may also reflect broader shifts in the luxury market, particularly evolving consumer preferences.
Stepping into the role of Burberry’s creative director in late 2022, Daniel Lee is spearheading the brand’s efforts to modernize and rejuvenate its identity. However, sales stumbled during the holiday season amid continued weakness in luxury demand. Lee succeeded Riccardo Tisci, who spent nearly five years revitalizing the brand with fresh imagery and collaborations.
Analysts anticipate a substantial 17.5% decline in Burberry’s sales in China during the fiscal fourth quarter, marking the most significant drop across regions. Nevertheless, they project a resurgence in luxury spending in China towards the year’s end.
