London-listed Burberry's (BURBY (OTC:BURBY)) shares fell more than 5.5% on Friday after the luxury fashion company posted a third-quarter trading update, lowering its full-year adjusted operating profit guidance.
With luxury fashion demand on the decline, Burberry revealed that retail revenue fell 7% to £706 million, while comparable store sales in the 13 weeks to December 30 declined by 4%. Burberry shares closed the session at 1,285.5p.
The company's CEO, Jonathan Akeroyd, said it is experiencing a challenging 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," he commented.
"The slowdown in luxury demand is having an impact on current trading," the company said, adding that it now expects adjusted operating profit for the financial year ended March 30 to be in the range of £410m to £460m, below its previous guidance.
In addition, based on foreign exchange rates as of December 29, 2023, BRBY anticipates a currency headwind of approximately £120m to revenue and around £60m to adjusted operating profit.
Reacting to the report, analysts commented that self-help is difficult in the best of times and close to impossible when the market is tough.
"Burberry's disappointing update during the crucial fourth calendar quarter of last year is the nth demonstration of this tenet," they added, noting that the stock has a Market Perform rating and a 1,673p price target.