Burberry is expected to report its worst financial results of the year in the fiscal fourth quarter this Wednesday, as the brand faces waning demand in the Chinese and U.S. markets, according to analyst estimates via Bloomberg.

The company’s shares fell in January after lowering its expectations in the wake of November’s profit warning, which cited a continued slowdown in luxury spending. Now, analysts have “limited faith” in Burberry’s ability to reinvigorate its brand identity over the next fiscal year, per Bloomberg Intelligence Deborah Aitken. Deutsche Bank analyst Adam Cochrane told the outlet that the imprint’s falling sales could also be due to a “tougher luxury market” and “shifting trends.”

“It is hard to pinpoint anything in particular which has gone wrong,” Cochrane added, before pointing out that “the timing of a big, bold new Burberry under Daniel Lee may have coincided with a period of ‘quiet luxury’ and the weakness of aspirational luxury.”

Lee became Burberry’s creative director in late 2022, as part of the House’s continued efforts to revamp the label. His designs first landed in stores last fall, and sales fell during the holiday season as luxury demand continued to weaken. The designer followed in the footsteps of Riccardo Tisci, who spent almost five years attempting to revive the brand with a refreshed image and a bevy of collaborations.

Now, analysts expect Burberry’s sales in China to decline by approximately 17.5% in the fiscal fourth quarter, which would be the largest fall across regions. However, analysts forecast that luxury spending in China will begin to increase toward the end of the year.

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