Burberry Christmas sales miss expectations in Macau, Hong Kong
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British trenchcoat maker Burberry Group Plc reported Christmas revenue that trailed its own forecast, hurt by a slump in demand in Macau and Hong Kong.
Retail revenue fell to 603 million pounds (USD869 million) in the three months through December, London-based Burberry said yesterday in a statement. Analysts predicted 606 million pounds, based on the median of estimates compiled by Bloomberg. Sales were unchanged on a comparable basis, missing internal expectations, compared with a 4 percent decline in the second quarter, Burberry said.
Hong Kong sales fell more than 20 percent. The U.K.’s largest luxury-goods maker is scaling back stores, cutting bonuses and consolidating products under one label after forecasting earnings will probably fall for a second straight year. Richemont reported Christmas season sales declined for the first time since 2008 .
Tourist bookings to Europe have declined following the terror attacks in Paris and an unseasonably warm winter has added to challenges facing luxury companies. Burberry is also more exposed than peers to spending by Chinese clients, which is cooling as that country’s stock market slumps.
The company anticipated in October a return to growth in last part of 2015, driven in part by new products such as lightweight cashmere trenchcoats and ponchos, and new styles of scarves. Bloomberg
Questions & Answers
Q.What was the actual retail revenue for Burberry in the three months through December, and how did it compare to analyst predictions?
What was the actual retail revenue for Burberry in the three months through December, and how did it compare to analyst predictions?
Burberry reported retail revenue of 603 million pounds for the three months through December. This figure was slightly below the 606 million pounds analysts had predicted, based on estimates compiled by Bloomberg.
Q.What factors are contributing to the challenging conditions for luxury companies like Burberry?
What factors are contributing to the challenging conditions for luxury companies like Burberry?
Declining tourist bookings to Europe after terror attacks, an unseasonably warm winter, and cooling spending by Chinese clients due to their slumping stock market are all contributing to challenges for luxury companies.
Q.What measures is Burberry taking in response to its financial performance?
What measures is Burberry taking in response to its financial performance?
Burberry is scaling back stores, cutting bonuses, and consolidating its products under one label. This comes after forecasting that its earnings will likely fall for a second consecutive year.
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