Burberry has issued a warning about its sales growth, stating that it is unlikely to meet its projected ‘low double-digit’ growth due to a global downturn in luxury spending.
The company attributed its reduced sales to weakened demand and cautioned that its annual profits would likely be at the lower end of the estimated range of £552m to £668m.
In the first half of the year ending on September 30th, Burberry saw a slight increase of 4% in sales, reaching £1.396bn, while its operating profit decreased by 6% to £223m.
Burberry CEO Jonathan Akeroyd acknowledged the challenges posed by the current macroeconomic climate, which has affected the company along with many other global luxury brands that have reported declines in sales.
The brand experienced a significant drop in like-for-like store sales growth in the second quarter, down to 1% from 18% in the first quarter, as growth in China tapered off.
Burberry noted that the spending habits of Chinese luxury consumers had shifted from mainland China to overseas markets.
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