British fashion group Burberry is still hampered by disappointing Asian sales. Particularly in China, where it realizes a third of its turnover, sales are going badly.
Europe and Americas compensate for Asia
In the first six months of its 2015/2016 fiscal year, Burberry managed a turnover of 1.079 billion pound (nearly 1.5 billion euro), slightly better than the 1.065 billion pounds from the same period in the year before. Increased American sales helped achieve this minor growth, as turnover there grew from 270 to 286 million pounds (385 million euro).
Asian sales however dropped from 385 to 377 million pounds (500 million euro), with the drop in Chinese economic growth a particular nuisance. Also, since the government tackled the act of giving luxury gifts to civil servants in its struggle against corruption, Burberry has lost a part of its customer base.
A lot of Chinese citizens now prefer to do their business and purchases in Europe, to take advantage of the cheaper currency, which is also reflected in the increased sales for the "Europe, Middle East and India" region. Those sales grew from 410 million pounds to 416 million pounds (560 million euro).
For the second part of its fiscal year, Burberry expects a single-digit like-for-like turnover growth, but the company also wants to lower its costs: travel expenses and marketing budgets will be closely monitored. With all this in mind, like-for-like gross profit for its 2015/2016 fiscal year (which ends March 2016) should reach 445 million pounds (600 million euro), slightly below last year's 456 million pounds.