China’s slowdown hit sales at Britain’s luxury fashion group Burberry, the company revealed on Thursday, sending its share price plunging more than 12 percent.
Turnover flatlined at 1.105 billion (1.704 billion, 1.485 billion euros) in the six months to September compared with 1.1 billion a year earlier, said Burberry, which is famous for its trench coats and signature accessories.
Market expectations had been for revenue of 1.16 billion, according to analysts polled by Bloomberg News.
Like-for-like sales, stripping out the impact of new floor space, rose by just one percent in the half-year, but sank by four percent in the second quarter.
The group also added that it saw a “mid single digit” drop across the Asia-Pacific as Chinese customers in particular reined in spending.
Burberry noted that “demand from luxury consumers, particularly Chinese customers, was affected by a more challenging external environment” in the second quarter.
In reaction in morning deals, Burberry shares tumbled 12.26 percent to 1,245 pence on London’s FTSE 100 index, which was 0.69 percent higher at 6,312.46 points.
“The external environment became more challenging during the half, affecting luxury consumer demand in some of our key markets,” said chief executive Christopher Bailey in the trading update.
“In response, we have intensified our focus on driving sales and productivity, while taking swift action on discretionary costs.”
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