Upmarket fashion house Burberry Group PLC (LON:BRBY) revealed lower sales and revenue and said wealthy tourists in Europe were buying less.
Burberry said comparable sales in the six months to March 31 fell 2%, dragged down by a 5% drop in the fourth quarter after a flat third quarter.
They rose 1% excluding an impact from Hong Kong and Macau, while growth continued in mainland China, Korea and Japan.
But sales to travelling luxury customers in continental Europe slowed and US domestic demand stayed uneven.
Total underlying revenue fell 1% to £1.41bn and underlying retail revenue was flat year-on-year at £1.06bn.
Underlying wholesale revenue fell 1% to £330mln as expected and underlying licensing revenue dipped to £16mln in line with full-year guidance.
There was better news in the group's digital business, which increased sales in all regions, while product innovation drove demand across scarves, ponchos and runway rucksacks.
Japan retail revenue more than doubled during the year.
Burberry said the outlook for 2017 was tough with wholesale business in the first half expected to fall by about 10% and underlying cost inflation pressures persisting.
Chief executive Christopher Bailey said: "In an external environment that remains challenging for luxury, we continue to focus on reducing discretionary costs and are making good progress with developing enhanced future productivity and efficiency plans.
"Meanwhile, brand momentum is strong, digital continued to outperform in the half and innovation in new products is resonating well with our customers."