UK: Burberry H1 sales growth slows on weakening demand in UK and China
Luxury brand Burberry saw sales growth slow in the second quarter as demand weakened in the UK and China.
The company said sales grew 8% over the half on an underlying basis to GBP883m (US$1.4bn). Retail revenue was up 10% to GBP577m, as comparable store sales grew 3% over the half.
Second quarter comparable sales growth accelerated in the latter weeks of the quarter, reaching 1%, an improvement on the flat comps revealed when the company issued a profit warning, which said comparable sales were flat over the 10 weeks to 8 September.
The company experienced lower footfall during the second quarter, but said this was countered by higher quality sales and average spend.
For the second quarter, the luxury brand said Americas and Europe comparable store sales were unchanged year-on-year, while Asia Pacific delivered slightly positive comparable store growth. Compared to the first quarter, Hong Kong, France and Germany maintained their robust performance, while the UK and China slowed. Korea and Italy remained weak.
Wholesale revenue increased 5% on an underlying basis.
"Against record prior year comparatives, Burberry delivered 8% total revenue growth and 10% retail growth in the first half, albeit slowing in the second quarter," said CEO Angela Ahrendts.
"In a more challenging external environment, footfall declined but brand momentum remained strong, particularly with our higher spending luxury consumer.
"Our highly experienced team remains very focused on the consistent execution of our key strategies, engaging consumers through innovative retail and digital marketing initiatives as we enter the most important quarter of the year. We continue to invest for long term growth in flagship and emerging markets, while tightly controlling discretionary spend."
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