It said full-year pre-tax profits would be broadly in line with recent analyst estimates of between £434m and £461m.
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This has resulted in Burberry’s underlying retail sales growing just 2 per cent to £774million in the six months to 30 September, well short of forecasts for an 8 per cent rise.
Halifax-born Christopher Bailey, chief executive and chief creative officer of Burberry, said: “The external environment became more challenging during the half, affecting luxury consumer demand in a few of our key markets”.
Burberry announced in a statement today that its retail revenue growth in the second quarter had been impacted by “increasingly challenging environment”, particularly in China.
The retailer said it would ramp up cost savings to offset slowing sales. The company’s assumptions include a return to mid-single digit percentage growth in comparable sales in the second half.
However, the FTSE 100 company reported double-digit growth in Europe, driven by the travelling luxury customer, who generates about 60pc of the region’s revenues, and strong demand for British-made trench coats and cashmere scarves.
China and Hong Kong have more recently proven a tough market for luxury brands, however, and the past months’ economic volatility in China have done little to help this, putting regional sales at a “mid single-digit percentage decline”. Looking further ahead, we maintain our focus on – and confidence in – the long-term growth opportunities for our business across channels, regions and product categories’.
For the same time period, Burberry posted a total revenue of £1,105m, with wholesales revenue down three per cent to £305m and licensing revenue down 18 per cent to £26m.
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On its calculations, around £50m of costs may need to be mitigated to preserve current consensus forecasts given the weak second quarter and outlook.
