Burberry (BURBY) Issues Sales Warning as Luxury Succombs to Macro Pressures (TIF) (JWN)
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Luxury retailers are feeling a pinch today following a warning issued by U.K.-based Burberry Group plc.
Tuesday, Burberry (OTCBB: BURBY) issued an update on second-quarter 2012 sales expectations ahead of its Investor Relations event. In the update, Burberry stated:
"Against strong comparatives last year, retail sales growth at constant exchange rates was 6% in the 10 weeks to 8 September 2012. Of this, new space contributed 6% while comparable store sales were unchanged year-on-year, with a deceleration in recent weeks. Ahead of the key retail trading period in the second half, Burberry currently expects adjusted profit before tax for the twelve months to 31 March 2013 to be around the lower end of market expectations."
CEO Angela Ahrendts noted that the sales slump was largely related to external pressures (i.e. - the macro environment).
The news is a continuation of issues afflicting the entire luxury sector. Burberry peers LVMH Moët Hennessy Louis Vuitton SA and PPR SA have both signaled a weakening environment recently. Both LVMH and PPR share prices fell along with Burberry shares in London trading Tuesday. Burberry is currently over 18 percent lower, with just a few hours left in London trading.
Recent data from China suggests a slowdown in growth for arguably one of the key markets luxury goods makers target. On Monday, data had Chinese exports growing only 2.7 percent in August, from growth of 20 percent in the same period last year.
Traders will be watching names like Tiffany & Co. (NYSE: TIF), Nordstrom (NYSE: JWN), LVMH (OTCBB: LVMUY), Michael Kors (NYSE: KORS), Coach (NYSE: COH), Ralph Lauren (NYSE: RL), Hermes Int'l (OTCBB: HESAF), and others.
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Tuesday, Burberry (OTCBB: BURBY) issued an update on second-quarter 2012 sales expectations ahead of its Investor Relations event. In the update, Burberry stated:
"Against strong comparatives last year, retail sales growth at constant exchange rates was 6% in the 10 weeks to 8 September 2012. Of this, new space contributed 6% while comparable store sales were unchanged year-on-year, with a deceleration in recent weeks. Ahead of the key retail trading period in the second half, Burberry currently expects adjusted profit before tax for the twelve months to 31 March 2013 to be around the lower end of market expectations."
CEO Angela Ahrendts noted that the sales slump was largely related to external pressures (i.e. - the macro environment).
The news is a continuation of issues afflicting the entire luxury sector. Burberry peers LVMH Moët Hennessy Louis Vuitton SA and PPR SA have both signaled a weakening environment recently. Both LVMH and PPR share prices fell along with Burberry shares in London trading Tuesday. Burberry is currently over 18 percent lower, with just a few hours left in London trading.
Recent data from China suggests a slowdown in growth for arguably one of the key markets luxury goods makers target. On Monday, data had Chinese exports growing only 2.7 percent in August, from growth of 20 percent in the same period last year.
Traders will be watching names like Tiffany & Co. (NYSE: TIF), Nordstrom (NYSE: JWN), LVMH (OTCBB: LVMUY), Michael Kors (NYSE: KORS), Coach (NYSE: COH), Ralph Lauren (NYSE: RL), Hermes Int'l (OTCBB: HESAF), and others.
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