LONDON — Burberry’s growth slowed in the crucial third quarter of the year, with retail revenue rising 1 percent to 719 million pounds at reported rates, and 2 percent at constant exchange.
That compares with the first half of the current fiscal year, where revenue was up 5 percent at reported exchange rates and 3 percent at constant ones. During the same period a year ago, Burberry’s retail revenue had fallen 1 percent at reported exchange rates and 2 percent at constant ones.
Shares were down nearly 4 percent to 21.73 pounds in afternoon trading.
Burberry said in a trading update Wednesday that new products designed by chief creative officer Riccardo Tisci continue to perform well, and now account for 75 percent of the mainline stores’ retail offer.
Worldwide, same-store sales growth was 3 percent, compared with 1 percent in the previous fiscal year. That growth was led by full-price sales, and despite continued disruptions in Hong Kong, Burberry said.
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Asia-Pacific grew by a low-single-digit percentage driven by mainland China, which was up in the mid-teens, while sales in Hong Kong halved. Tourist spend boosted sales in the EMEIA region, with Continental Europe in particular benefiting from tourist spend.
The Americas were stable, with the U.S. growing by a low-single-digit percentage, partially offset by Canada.
The company also raised its revenue guidance, saying it expects full-year revenues to grow by a low-single-digit percentage at constant exchange, compared to previous guidance of “broadly stable.” Adjusted operating margin is expected to remain broadly stable at constant exchange, despite the impact of disruptions in Hong Kong S.A.R.
Burberry said Wednesday it had made “good progress” in the quarter “as we increased the availability of new products and continued to evolve our retail and wholesale networks.”
Marco Gobbetti, Burberry’s chief executive officer, said the company remained confident in the strategy and outlook for 2020 despite an uncertain macro-economic environment.
The company said it had maintained its focus on inspiring Chinese consumers. At the end of December, Burberry launched its Lunar New Year campaign “which has generated a strong early consumer response.”
As reported, preparations are under way to take the fall 2020 runway show to Shanghai in April and open its first social retail store in Shenzhen, in partnership with Tencent, in the first half of next financial year.