Burberry has reported a 3% fall in like-for-like sales and flat retail revenues of £423m after what it called a “challenging” first quarter.
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Analysts had been expecting same-store sales to decline 5% and the figures will reassure investors as Celine CEO Marco Gobbetti, prepares to take over from Christopher Bailey at the helm of the London company.
Burberry now expects wholesale revenue in the six months ending September 30 to be down by over 10% from previous year, a deterioration from May guidance in which Burberry said it expected a decline of around 10%.
“In what remained a challenging external environment, underlying retail sales were flat in the first quarter”, he said in a statement.
However, it is benefiting from a drop in the value of the pound after the United Kingdom voted to leave the European Union last month. Writing on Monday the analysts said that Burberry’s May restructuring plan, created to drive revenue growth, boost productivity and achieve at least £100 million in additional cost cuts by the 2019 fiscal year, “could take more time to executive”, given the management changes.
Mr. Bailey said the recent management changes, along with steps Burberry has taken since concluding a strategic review of its business in May, “gives us real confidence for the future”.
On Monday, Burberry announced chief executive Christopher Bailey would be replaced after two years in the post.
Burberry shares have lost more than a third of their value over the past 12 months after sales in Asia – particularly Hong Kong – fell as Chinese consumers reined in spending.
The firm is struggling to counter a downturn in mainland China and Hong Kong and fewer tourists in Europe.
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Burberry warned its wholesale unit, which makes up about a quarter of the business, will see sales dip by around 10pc in the six months to September. The company said the Americas continued to experience uneven demand from domestic customers, while spend by the travelling luxury customer remained down by a double-digit percentage.
