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| Fewer wealthy Chinese tourists hits Burberry sales in Europe | Fewer wealthy Chinese tourists hits Burberry sales in Europe |
| (35 minutes later) | |
| Burberry’s share price has taken a dive after it reported a sales slowdown in Europe, as luxury Chinese shoppers stayed away from the region following the Paris terror attacks in November. | |
| The luxury fashion brand warned that a “challenging” environment would push full-year profits in the year ahead to the bottom end of analyst expectations. | The luxury fashion brand warned that a “challenging” environment would push full-year profits in the year ahead to the bottom end of analyst expectations. |
| In a trading update for the second half of the financial year, Burberry said: “Continental Europe slowed in the fourth quarter as sales from the travelling luxury customer, particularly the Chinese, declined year-on-year, offset in part by growth from domestic customers. The UK and Middle East remained difficult throughout the half.” | In a trading update for the second half of the financial year, Burberry said: “Continental Europe slowed in the fourth quarter as sales from the travelling luxury customer, particularly the Chinese, declined year-on-year, offset in part by growth from domestic customers. The UK and Middle East remained difficult throughout the half.” |
| In early trading on Thursday, Burberry shares fell nearly 6% to about £12.66. | In early trading on Thursday, Burberry shares fell nearly 6% to about £12.66. |
| Demand for Burberry goods fell in France, Germany, Spain and Italy amid a general sense of unease about security and fears of further terrorist attacks in Europe. | Demand for Burberry goods fell in France, Germany, Spain and Italy amid a general sense of unease about security and fears of further terrorist attacks in Europe. |
| Burberry’s like-for-like sales – excluding stores open for less than a year – fell 2% in the six months to 31 March. The fourth quarter was particularly weak, with sales down 5%. | Burberry’s like-for-like sales – excluding stores open for less than a year – fell 2% in the six months to 31 March. The fourth quarter was particularly weak, with sales down 5%. |
| Trading at Burberry was weak across all of its key divisions, including Asia Pacific – the largest part of its business. Sales fell 20% in Hong Kong, but rose in mainland China. | Trading at Burberry was weak across all of its key divisions, including Asia Pacific – the largest part of its business. Sales fell 20% in Hong Kong, but rose in mainland China. |
| Christopher Bailey, Burberry’s chief executive said: “In an external environment that remains challenging for luxury, we continue to focus on reducing discretionary costs and are making good progress with developing enhanced future productivity and efficiency plans.” | Christopher Bailey, Burberry’s chief executive said: “In an external environment that remains challenging for luxury, we continue to focus on reducing discretionary costs and are making good progress with developing enhanced future productivity and efficiency plans.” |
| Total revenue at Burberry was down 1% in the second half, at £1.41bn. The company said profits for the full-year that ended in March 2016 were expected to be in line with City expectations. | Total revenue at Burberry was down 1% in the second half, at £1.41bn. The company said profits for the full-year that ended in March 2016 were expected to be in line with City expectations. |
| However, Burberry issued a warning about the current financial year: “We currently expect full-year 2017 adjusted profit before tax to be around the bottom of the range of analysts’ expectations.” | However, Burberry issued a warning about the current financial year: “We currently expect full-year 2017 adjusted profit before tax to be around the bottom of the range of analysts’ expectations.” |