Luxury fashion brand Burberry is blaming adverse changes in foreign exchange rates for a big part of its reduced earnings.
Currency movements accounted for 31 million pounds (39.3 million euros) of the fall in its pretax profits in the six months through to the end of September.
Pretax profits were 141.8 million pounds (179.8 million euros)compared with 159 million pounds in the same period last year.
However the British company said it does not anticipate that will be an ongoing problem. “At current rates, we do not expect foreign exchange to have a material impact on underlying profits for the second half,” Burberry Finance Director Carol Fairweather told a conference call with journalists.
Burberry said trading remains tough, “with pockets of weakness in Europe” while demand from the Chinese, which fell significantly in recent months, has not really improved and spending by the Russians also remains lower in the face of the weaker rouble.
However, the company said it continued to trade better than many of its luxury rivals in China, where it bought out franchise partners three years ago.