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Burberry projects slump in profits
Source: Bloomberg News |
September 12, 2012, Wednesday
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Print Edition
Print Edition
BURBERRY Group, the United Kingdom's largest luxury-goods maker, said full-year profits will disappoint after sales growth slowed globally, sending the shares down the most ever and rattling those of peers.
"We know we are not alone in terms of what we've seen in the last couple of weeks," Chief Financial Officer Stacey Cartwright said yesterday.
Burberry fell as much as 20 percent, the steepest drop since the company's 2002 initial public offering, while LVMH Moet Hennessy Louis Vuitton, Cie Financiere Richemont, and PPR also slumped. Profit for the year through March will be at the lower end of analyst estimates, Burberry said.
In July, the company reported slowing sales as licensing revenue slipped, trailing estimates for a second straight quarter.
Burberry was down 19 percent at 1,118 pence as of 12:43 pm LVMH dropped as much as 4.7 percent in Paris trading, Richemont fell as much as 6.5 percent in Zurich and PPR, owner of the Gucci brand, declined as much as 4.3 percent.
Before yesterday, analysts had estimated adjusted pretax profit for the year of 407 million pounds (US$652 million) to 454 million pounds, according to Burberry. The average estimate of 14 analysts compiled by Bloomberg was about 429 million pounds.
"The traveling consumer out of Asia, out of China in particular, may not be as prevalent as they were in terms of some of the entry price products, the aspirational luxury products," Cartwright said. "That's potentially hitting Europe these last few weeks."
Sales at stores open at least a year were unchanged in the 10 weeks ended September 8, with a "deceleration in recent weeks," Burberry said in yesterday's statement. Retail sales, excluding currency shifts, rose 6 percent, compared with growth of 14 percent in the first quarter, the company also said.
"We know we are not alone in terms of what we've seen in the last couple of weeks," Chief Financial Officer Stacey Cartwright said yesterday.
Burberry fell as much as 20 percent, the steepest drop since the company's 2002 initial public offering, while LVMH Moet Hennessy Louis Vuitton, Cie Financiere Richemont, and PPR also slumped. Profit for the year through March will be at the lower end of analyst estimates, Burberry said.
In July, the company reported slowing sales as licensing revenue slipped, trailing estimates for a second straight quarter.
Burberry was down 19 percent at 1,118 pence as of 12:43 pm LVMH dropped as much as 4.7 percent in Paris trading, Richemont fell as much as 6.5 percent in Zurich and PPR, owner of the Gucci brand, declined as much as 4.3 percent.
Before yesterday, analysts had estimated adjusted pretax profit for the year of 407 million pounds (US$652 million) to 454 million pounds, according to Burberry. The average estimate of 14 analysts compiled by Bloomberg was about 429 million pounds.
"The traveling consumer out of Asia, out of China in particular, may not be as prevalent as they were in terms of some of the entry price products, the aspirational luxury products," Cartwright said. "That's potentially hitting Europe these last few weeks."
Sales at stores open at least a year were unchanged in the 10 weeks ended September 8, with a "deceleration in recent weeks," Burberry said in yesterday's statement. Retail sales, excluding currency shifts, rose 6 percent, compared with growth of 14 percent in the first quarter, the company also said.
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