Burberry hit by slower U.S. sales growth
By Mark Potter
LONDON (Reuters) - British luxury brand Burberry Group Plc BRBY.L 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.
Jeweler Tiffany (TIF.N: Quote) and watchmaker Swatch UHR.VX last week warned of slower growth.
However, Swiss luxury group Richemont CFR.VX on Monday said its third-quarter sales held up well. Continued...