Burberry warns of sales slowdown
Burberry, the iconic British clothing brand, saw its shares fall in early trading today as it warned that profits this year would be at the lower end of expectations.
The group said in a statement that retail sales growth was 6% in the ten weeks to 8 September 2012 against strong comparatives last year. Of this, new space contributed 6% while like-for-like sales were flat year-on-year, with a deceleration in recent weeks.
Ahead of the key retail trading period in the second half, Burberry said it expected adjusted profit before tax for the 12 months to 31 March 2013 to be around the lower end of market expectations.
Angela Ahrendts, Burberry chief executive, commented: "As we stated in July, the external environment is becoming more challenging. In this context, second quarter retail sales growth has slowed against historically high comparatives. Given this background, we are tightly managing discretionary costs and taking appropriate actions to protect short term profitability, while continuing to execute on our proven five key strategies."
Burberry operates 196 retail stores, 207 concessions, 48 outlet shops and 58 franchise stores around the world. In its last financial year, the group saw its profits increase by 24% to £366 million while total revenues rose 24% to £1.9 billion.
However in July the group said its sales growth had slowed in its first quarter as a result of challenging trading conditions.
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