Burberry Group Plc (LON:BRBY) chief executive Christopher Bailey highlighted a ‘challenging external environment’ as the luxury brand revealed a 3% reduction in comparable sales for the three months to June 30.
Retail revenue amounted to £423mln, unchanged on an underlying basis, but all three of the group’s key regions experienced what Burberry described as “low single-digit percentage” decline in sales.
It noted that trading in the UK improved in the final weeks of the quarter, but in continental Europe activity remained depressed. Sales in the Americas saw uneven demand, while ‘some improvement’ was reported in Hong Kong.
Digital sales, meanwhile, outperformed store sales and grew strongly in all regions. Almost 60% of traffic to the Burberry site now comes from mobile devices, it added, and mobile was responsible for the majority of growth.
Burberry said it expects profits to be ‘more second half-weighted’.
However, due to tighter inventory controls with American customers it has now downgraded expectations for wholes revenues for the six months to September 30. It now anticipates a 10% decline compared to the same period of 2015.
Bailey, in a statement, said: “In what remained a challenging external environment, underlying retail sales were flat in the first quarter.
“In this context, we continue to focus on managing our business with agility whilst implementing the ambitious evolution of our strategies and ways of working we outlined in May, to position Burberry for long-term growth. These plans are now well underway and on track to deliver our financial goals.”
As announced yesterday Bailey is to be replaced as chief executive by Marco Gobbetti, who currently runs French brand Céline and will join in 2017.
Bailey will subsequently become Burberry president and chief creative officer.