The company posted pre-tax losses of £609,000 for the six months to September 30, compared to £515,000 a year earlier.
Retail sales grew 2% to £56.6mln but fell 1% on a like-for-like basis as a slowdown in the UK market offset strong demand from tourists.
Total revenues, including from wholesale distribution, were broadly unchanged from a year earlier at £74.6mln.
“We continue to see strong demand from tourists in London and whilst the UK remains uncertain, the group remains in a strong position to invest in further developing the customer experience in key international markets and enhancing its unique UK design and manufacturing base,” said chief executive Theirry Andretta.
The company continued its expansion during the period with a focus on Asian markets, including the development of its Japan business.
Operating expenses increased to £46.6mln from £44.6mln, reflecting higher marketing costs and investment in its retail network.
Mulberry switches focus back to affordable luxury
However, gross margins improved by 248 basis points to 61.5% due to less markdowns and a focus on full price sales after returning to its roots as an affordable luxury label following an ill-fated attempt to go more upmarket.
In the first 10 weeks of the second half, retail like-for-like sales rose 1%, including a 1% decline in the UK and a 12% increase in international like-for-like sales.
Shares in Mulberry fell 1.18% to 1,005p in morning trading.
Soft trading but Brexit offers 'silver lining'
“Mulberry's turnaround isn't going quite as smoothly as hoped. Soft trading reported during the traditionally-slower first quarter has persisted throughout the summer,” said Fiona Cincotta, senior market analyst at City Index.
But she said there is a “silver lining” from Brexit uncertainty as the pound’s weakness is making holidays to the UK and Mulberry's handbags cheaper for tourists to buy.
The company has also managed to strengthen its margins despite a slump in UK consumer confidence, Cincotta said.
“New creative designer Johnny Coca's concoctions are proving to be popular with shoppers, while the company's expansion into Asian markets holds much promise,” she added.
“As oxymoronic as it may sound, Mulberry's 'affordable luxury' branding position is giving the bag-maker some of its mojo back during what is a difficult time for the industry.”