![Luxury, Burberry: without fog lights Luxury, Burberry: without fog lights](https://media.lesechos.com/api/v1/images/view/6644f088aef116529e1c58c8/1280x720/01101093205009-web-tete.jpg)
Even a historic flagship of the raincoat fights with difficulty against the fog. The City therefore does not want to sing in the rain which affects Burberry (-7.3% for the action). Not only was the last quarter of the financial year ending at the end of March the worst of the four (-12% for organic sales), particularly in China (-19%), but the current first half will remain “challenging”, particularly for income from the “wholesale” activity (-25% planned), without further details.
If Kering had also warned of a year in two stages, Burberry’s staggered exercise caused the bad weather to last until the end of September. Current operating profit has already fallen by a third in 2023-2024, with 5 margin points less, and annual “free cash flow” has been divided by six, with an increase in inventories.
Debt leverage
The positioning is not high-end enough to provide an umbrella against the global luxury downturn. And the 2.4-fold increase in net debt places debt leverage (1.4 times gross operating surplus) above the target range (0.5 to 1 time). Boss Jonathan Akeroyd, responsible for continuing the “recovery story” constantly promised since the beginning of 2017, is not worried.
The dividend is also maintained, at a level one fifth higher than forecasts. But shareholder treats seem less seasonal. Without the share buyback, debt leverage would have remained below its ceiling (at 0.9 times).
![Business - Solo.png](https://media.lesechos.com/api/v1/images/view/664328fc422df037f55acd1b/300x300/entreprise-solo.png)
New: discover our Premium offers!
Your responsibilities require careful attention to the events and power relationships that govern our world. You need to anticipate major trends to recognize, at the right time, the opportunities to seize and the risks to prevent. This is precisely the promise of our PREMIUM offers: to provide you with exclusive analyzes and sector monitoring tools to take informed decisions, identify weak signals and support your biases. Don’t wait any longer, the most decisive decisions for your 2024 success can be made now!
I discover the offers