The U.K.-based luxury brand Burberry Group Plc reported in a statement that there was a slowdown in its sales growth over the second fiscal quarter amid decreased demand by Chinese customers.
According to Burberrys statement, its total underlying sales in the quarter ended on September 30th, increased by 14% and reached £1.1 billion ($1.8 million) in comparison with the results generated during the same period a year ago. The companys retail revenue increased by 8% and reached £748 million in the six months to September 30th.
The comparable sales from the companys own stores, increased by 10% over the period. The comparable sales growth of the U.K.-based luxury goods maker during the first quarter was 12%.
In addition, the company also projected that the difficulties in the market are to hurt its annual profitability. Burberry said in its statement, cited by Bloomberg, that demand from travel retail and European customers will be “bore cautious” over the second six months of the year. It also added that there is expected “slight downward pressure” on margins.
The Chief Executive Officer of the company, Mr. Christopher Bailey, who took over Burberry in May 2014, said in Burberrys statement, cited by the Wall Street Journal: “Looking ahead, while mindful of the more difficult external environment, we have never been better prepared internally for the all-important festive periods.”
Under the lead of Chief Executive Officer Bailey, the U.K.-based company started to work in collaboration with Amazon.com Inc. and Tmall.com, which is owned by Alibaba Group Holding Ltd, in an attempt to increase its online sales of Brit Rhythm fragrances and some other products of its portfolio.
Burberry Group Plc lost 5.14% to trade at GBX 1 402.95 per share by 8:46 GMT, marking a one year drop of 11.49%. The company is valued at £6.57 billion. According to the Financial Times, the 21 analysts offering 12-month price targets for Burberry Group Plc have a median target of GBX 1 620, with a high estimate of GBX 2 128 and a low estimate of GBX 1 400. The median estimate represents a 9.53% increase from the last price of GBX 1 479.
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