Burberry plc (BURBY) shares fell to a three month low in early London trading Wednesday after the luxury goods makers posted weaker-than-expected second half sales growth Wednesday and a slowdown in fourth quarter activity linked to a "challenging environment" in North American markets.
The luxury goods maker said retail revenues for the six months ending in March grew 3% on an underlying basis to £1.268 billion thanks to growth in China and Asia Pacific markets. However, total revenues for the period slipped 1% to £1.607 billion, the company said, "with performance reflecting the implementation of strategic priorities and actions to improve brand positioning, notably in the US and in Beauty."
Burberry shares fell more than 6% in the opening hour of London trading to change hands at 1,600 pence each, the lowest since Jan. 17.
"In an uncertain environment, we continue to take action to strengthen the brand and reposition Burberry for growth," CEO Christopher Bailey said. "The outperformance of fashion and the strong customer response to new products underline our renewed creative momentum. I am delighted that Marco and Julie have now joined the business. While we have more to do, as we build on our progress so far, we remain confident about Burberry's prospects in the longer term."
Comparable sales for the company's fourth quarter were also slower than expected, growing just 2% compared to analysts' forecasts of between 3% and 4%. The group said its U.K. sales were "exceptional" thanks to growth from both travelling and domestic customers.