UPDATE 2-Burberry hit by slower U.S. sales growth
* Q3 revenues 574 mln stg vs forecast 569 mln
* Q3 like-for-like sales up 13 pct; forecast up 12 pct
* Strong demand from Asia-Pacific and tourists
* US results hit by fewer sales to dept store outlets
* Shares down 1.9 pct
By Mark Potter
LONDON, Jan 17 (Reuters) - British luxury brand Burberry Group Plc reported a sharp slowdown in U.S. sales growth as it chose to cut back supplies for department stores to sell through their discount outlets, knocking its high-flying shares.
The 156-year-old seller of raincoats and leather goods, known for its camel, red and black check pattern, said on Tuesday it wanted to focus on more profitable full-price sales and was seeing no overall moderation in demand.
The group met forecasts with a 22 percent rise in third-quarter revenue. Some analysts said the figures were flattered by a pulling forward of wholesale orders and that the firm's full-year guidance implied little growth in fourth-quarter wholesale sales.
"Nothing wrong with the overall numbers, however the poor performance in the U.S. and the weak 4Q guidance may worry the market," Liberum analysts said in a research note.
At 0915 GMT, Burberry shares were down 1.9 percent at 1,275 pence, the biggest fall at that time by a European blue chip stock.
Luxury goods shares have wobbled in recent months amid signs of a slowdown in economic growth in China, the engine of recent strong demand for high-end goods, and fears the euro zone debt crisis could drag the world back into recession.
Jeweller Tiffany and watchmaker Swatch last week warned of slower growth.
However, Swiss luxury group Richemont on Monday said its third-quarter sales held up well.
Burberry's shares, which rocketed around 10 times in value from November 2008 to July 2011, are trading well below their peak of 1,610 pence, but also clear of their October low of 1,034 pence.
ASIANS AND TOURISTS
Burberry said it made 574 million pounds ($880 million) of revenue in the three months to Dec. 31, just above analysts' average forecast of 569 million in a Reuters poll.
Finance chief Stacey Cartwright said the slowdown in growth from 29 percent in the first half was due to tougher comparable figures the year before and demand from Asian shoppers and tourists in particular remained strong.
Sales in the Asia-Pacific region jumped 39 percent to 210 million pounds, accounting for the largest proportion of the total, while strong demand from travellers drove sales in major cities such as London, Paris and Hong Kong.
Sales growth in the Americas, however, slowed to 4 percent from 20 percent in the first half.
Cartwright said this was due to the group's decision to cut back sales to the discount outlets of department stores and focus on more profitable full-price sales. Demand in Burberry's own stores in the Americas remained strong, she added.
Sales at retail outlets open over a year climbed 13 percent for the group as a whole, just ahead of a forecast 12 percent increase, though down from 16 percent in the first half.
Burberry said it was pressing ahead with its expansion plans while remaining mindful of the difficult economic backdrop.
It expects retail selling space to rise 13-14 percent in the second half, down from around 15 percent previously, due in part to the closure of some concessions in Spain.
Cartwright said southern European shoppers were showing more strain from the euro zone debt crisis than those in the north.
Burberry remained comfortable with analysts full-year consensus forecast for underlying profits to grow by about a quarter to 375 million pounds, she added.
The group said wholesale revenues rose 15 percent at constant currencies, helped by a rephasing of deliveries to the third quarter from the fourth. It expects wholesale revenues for the second-half to rise by a mid-single digit percentage.
- Canada's parliament attacked, soldier fatally shot nearby |
- NOAA employee charged with stealing U.S. dam information
- Sweden gets two new sightings, as hunt for undersea intruder goes on
- Canada probes Michael Zehaf-Bibeau as possible suspect in Ottawa shooting: source
- Special Report: Traffickers use abductions, prison ships to feed Asian slave trade