British fashion label Burberry had to deal with lower turnover in the final six months of its broken fiscal year 2016. Particularly its fourth quarter (January until the end of March) was disappointing.
Retail did perform well
Burberry's six-month turnover dropped year-on-year from 1,423 to 1,410 million pounds, about 1.8 billion euro. Turnover in the most important branch for the traditional British brand, retail, had a slight turnover increase from 1,059 to 1,064 million pounds (although underlying turnover remained stable). That was mainly because of Japanese retail, which more than doubled its yearly turnover compared to the year before. Turnover for the Licensing and Wholesale division plummeted to 16 and 330 million pounds respectively.
Liberum's analysts point to weak fourth quarter sales. "America was weak, while Hong Kong and Macau were lackluster and European tourist turnover slowed down."
For its current fiscal year, Burberry CEO Christopher Bailey points to "challenging market conditions", although it looks like those will be partially countered by advantageous exchange rate fluctuations. However, investors were not amused and sent the share crashing down 6 %.