Shares in Burberry Group PLC (LSE:BRBY) fell 8% to 1,605.5p, the lowest in over a year, after the fashion group warned that if the recent global slowdown in demand for luxury goods continues it is unlikely to hit its full-year revenue targets.
Like-for-like (LFL) sales growth in the second quarter plunged to just 1% compared to 18% in the first three months, half-year results showed, with growth in all regions slowing.
LFL growth in Asia Pacific fell from 36% in the first quarter to 2% in the second; the Americas worsened from -8% to -10%; and Europe, Middle East, India and Africa from 17% to 10%.
For the group as a whole, the six months to end-September saw LFLs of 10% for the group, with revenue up 4% to just under £1.4 billion but operating profits falling 15% to £223 million.
"We are confident in our strategy and remain committed to achieving our medium and long-term targets. The slowdown in luxury demand globally is having an impact on current trading," the FTSE 100-listed company said.
"If the weaker demand continues, we are unlikely to achieve our previously stated revenue guidance for FY24."
If this does occur, it expects adjusted operating profit would be towards the lower end of the current City analyst forecast range, making it nearer £552 million than the £668 million top-end figure.
It expects a currency headwind of £110 million to revenue and around £60 million to adjusted operating profit, though this is less than it had guided previously.
Analysts at Deutsche Bank said first-half revenues were above the consensus forecast and underlying earnings (EBIT) of £223 million also beat consensus of £218 million.
"Within this the 2Q comp retail sales were weaker than expected at +1% which was below cons expectations for +4%."
On the new guidance, the bottom end of this would imply around a 10% downgrade.