Member Article

Burberry profit warning cuts shares by 19%

Fashion house Burberry have announced an unexpected profit warning in its second quarter results, after challenges in the market.

Shares in the British luxury brand fell by a significant 19% in early market trading, after the firm said sales had remained stagnant year-on-year.

Retail sales growth at constant exchange rates stood at 6% in the quarter ending on the 8th September, while new space also contributed 6%.

Burberry, which established itself in 1865, said expectations for the full year would be “around the lower end of market expectations.”

Chief Executive of the brand, Angela Ahrendts, said: “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 plan to support growth by investing in “under-penetrated” markets, pushing for retail led growth and focussing on non-apparel sections, as well as leveraging the franchise and developing “operational excellence”.

The global brand, which specialises in “British heritage” goods such as their signature trench coat, has 196 stores, 207 concessions and 48 outlets worldwide.

This was posted in Bdaily's Members' News section by Miranda Dobson .