First Quarter Trading Update

Retail revenue 13 weeks ended 29 June

Comparable store sales by region

We believe there is an opportunity to reconnect with our core customer base and capitalise on the enduring appeal of Burberry’s iconic products and brand whilst delivering relevant newness. Against a backdrop of slowing luxury demand across all key regions, our immediate focus is on:

• Rebalancing our product offer to include a broader everyday luxury offer and a more complete assortment across key categories
• Refining our brand communication to emphasise more of the timeless, classic attributes that Burberry is known for. Our refocused marketing plans include a dedicated outerwear campaign to be launched globally in October, building on the established resilience of our house icons
• Improving customer conversion online with a more edited assortment and better functionality. The refresh of our website will be completed by the end of August
• Driving operational efficiencies and delivering cost savings to offset the impact of inflation.

Burberry also separately announced today the appointment of Joshua Schulman as Chief Executive Officer and Executive Director, replacing Jonathan Akeroyd who is stepping down and leaving the Company with immediate effect by mutual agreement with the Board.

Outlook

The slowdown in trading we experienced in Q1 FY25 continued into July. If this trend were to continue through the current quarter, we would expect to report a H1 FY25 operating loss and FY25 operating profit to be below current consensus. As we navigate this period, we have decided to suspend dividend payments in respect of FY25 in order to maintain a strong balance sheet and our capacity to invest in Burberry’s long term growth¹.

We expect the actions we are taking to start to deliver an improvement in our second half and to strengthen our competitive position and underpin long-term growth. 

In FY25, we expect:

• Retail space to be broadly stable
• Wholesale revenue to decline by around 25% in H1 and decline by around 30% for the full year
• Capital expenditure to be around £150m
• A currency headwind of c.£55m to revenue and c.£20m to operating profit in FY25, based on foreign exchange rates effective as of 28 June 2024.

Regional comparable sales performance

We are operating against a backdrop of slowing luxury demand with all key regions impacted by macroeconomic uncertainty and contributing to the sector slowdown.

In this context, Q1 FY25 comparable store sales fell 21%. All regions declined outside of Japan:

• Asia Pacific decreased 23% with Mainland China -21%, South Asia Pacific -38%, South Korea-26% and Japan +6%. 
  • Globally, the Chinese customer group also declined but held up better than Mainland China as spend was diverted offshore.
  • Japan continued to grow, benefitting from strong tourism spend mainly from Chinese and near shore customers in Asia, whilst locals remained soft.
• Americas decreased 23%, driven by declining locals. Globally, the Americas customer groupperformed broadly in line with the regions.
• EMEIA fell 16% with local spend deteriorating versus last quarter. Tourists accounted for justover half of retail revenues but declined by a high single digit percentage.

By product, outerwear and scarves continued to outperform globally.

The contribution from space was 1%, leading to a 20% decline in retail sales at constant exchange rates.

Currency was a 2% headwind this quarter, with retail revenue landing at £458m, down 22% at reported exchange rates.