Burberry cautioned that achieving its projected sales growth in the ‘low double digits’ for the year is improbable due to a global decline in luxury expenditure.
Impacted by the dampened demand, the retailer stated that the current trading conditions are being adversely affected and anticipated profits for the year to hit the lower boundary of the existing consensus range of £552m to £668m.
During the first half of the year until 30 September, sales inched up by 4% to £1.396bn while operating profit saw a decline of 6% to £223m.
Burberry’s CEO, Jonathan Akeroyd, confessed that the “macroeconomic environment has recently become more arduous,” as Burberry joined numerous global luxury brands in reporting sales slumps.
The luxury label experienced a marked deceleration in comparable store sales growth in the second quarter, dropping to 1% from 18% in the first quarter, due to diminishing growth in China.
Burberry noted that spending by affluent Chinese consumers had transitioned from mainland China to overseas regions.
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