British luxury brand Burberry says it probably won't meet its low double-digit revenue growth forecast for the year.
ADVERTISEMENTBurberry shares fell 10% when European markets opened on Thursday after the company said it was unlikely to meet its low double-digit annual revenue growth forecast.
The British luxury fashion house is struggling with the slowdown in luxury spending worldwide. The group reported a sharp drop in comparable store sales growth to 1% in its second quarter, down from 18% in the first.
Burberry's growth in China evaporated, with store sales falling 8% in its second quarter. Between April and June*, sales in the Asian country rose 46% compared to the same period last year, highly affected by Covid-19 lockdowns.
From July to September, Europe, the Middle East, India and Africa were the regions where the company's sales increased the most - by 10%.
The downbeat tone of the luxury sector is explained by rising inflation and economic uncertainty, which has curbed shoppers' appetite for luxury after years of blockbuster demand.
The UK brand is therefore not alone in the struggle.
LVMH, the world's biggest luxury group with brands including Louis Vuitton and Dior, reported a slowdown in quarterly sales in October, as did the Kering group, which owns brands such as Gucci and Yves Saint Laurent.
Cartier-owner Richemont has also predicted slower growth.
*Burberry's fiscal year starts on 1 April.
