Burberry hit by slower U.S. sales growth

Tue Jan 17, 2012 4:36am EST
 
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By Mark Potter

LONDON (Reuters) - British luxury brand Burberry Group Plc (BRBY.L: Quote) 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...