Burberry has cautioned against any expectations of a swift turn around in its fortunes after the luxury brand suffered a worse than expected dip in profits.
The fashion giant saw total revenue dip by one per cent to £2.52bn for the year to 31 March, driven largely by a slump in demand from Hong Kong and Macau. As a result adjusted profits before tax fell £35m to £421m and reported profit before tax sank 6.5 per cent to £416m, slightly worse than already pessimistic forecasts.
Other figures released by the fashion house showed that underlying operating profits declined by 11 per cent.
Looking ahead Burberry anticipates continued drag from the "challenging" retail environment with the brand expecting single digit over the next five years at best, albeit with a continued strong showing from ecommerce.
Burberry chief executive Christopher Bailey said: "While we expect the challenging environment for the luxury sector to continue in the near term, we are firmly committed to making the changes needed to drive Burberry's future outperformance, underpinned by strong brand and business fundamentals.”
In its own internal review Burberry acknowledged that it is increasingly reliant on "new and existing Chinese consumers" to power its growth as picky shoppers demand "experiences, newness, greater authenticity and story-telling" from its products.