earnings summary

Earnings Results: • Solid financial results in H1 FY24 despite challenging macro environment • Retail revenue up 10% on a comparable basis, driven by Leather Goods and Outerwear • Adjusted operating profit up 1% at CER, with margin pressure from investments • Slowdown in luxury demand globally towards the end of the period, impacting Q2 results

Future Guidance: • Previously stated FY24 revenue guidance unlikely to be achieved if weaker demand continues • Adjusted operating profit expected to be towards the bottom of current consensus range • Remains confident in brand and strategy, committed to achieving medium and long-term goals • Focus on accelerating recruitment, evolving product, and identifying efficiencies in the next 12-18 months

The H1 FY24 results for Burberry showed solid performance despite an increasingly challenging macroeconomic environment. Retail revenue grew 10% on a comparable basis, driven by strength in Leather Goods and Outerwear, as well as positive momentum in EMEIA, Japan, and South Asia Pacific. However, the company experienced a slowdown in luxury demand globally towards the end of the period, which weighed on Q2 results.

Burberry made significant progress across its strategic plan, with positive early response to the new brand identity and collections under Creative Director Daniel Lee. The company continued to focus on brand elevation, product innovation, and distribution optimization. However, the slowdown in luxury demand is impacting current trading, and Burberry is unlikely to achieve its previously stated FY24 revenue guidance if the weaker demand persists. In this context, adjusted operating profit is expected to be towards the bottom of the current consensus range.

Despite the near-term challenges, management remains confident in the brand and strategy, and is committed to achieving its medium and long-term goals. In the next 12-18 months, Burberry will focus on accelerating recruitment, evolving its product offer, and identifying efficiencies to navigate the uncertain macro environment.

Notable quotes: • Jonathan Akeroyd, CEO: “While we’re still in the early stages of executing our plan, I am proud of the progress we have made. I’m particularly pleased with what we have achieved in the past six months.” • Jonathan Akeroyd, CEO: “We are mindful of the current uncertain macroeconomic environment and its impact on short-term luxury demand. But we believe that our strategy is the right one and we will continue to invest in key growth initiatives to deliver our medium-term ambition and goals.”