LONDON, United Kingdom — Burberry Group Plc, the U.K. maker of $995 trench coats, reported first-half sales sales that met analysts’ estimates as online marketing initiatives helped cushion slowing Chinese and Russian demand.
Retail revenue rose 8 percent to 748 million pounds ($1.2 billion) in the six months through September, London-based Burberry said today in a statement, slowing from 9 percent in the first quarter. The median of 12 analysts’ estimates was 749 million pounds.
Initiatives such as click-and-collect, which allows shoppers to order products online and pick them up in stores, have helped Burberry outperform its peers even as the pound’s strength and softer tourist demand in Hong Kong and Europe weigh on growth. The company today said that while exchange rates have become less unfavorable, it faces a “more difficult external environment.”
Fewer Chinese tourists have been shopping in Hong Kong because of pro-democracy protests, while fighting in Ukraine and the resulting sanctions have depressed Russian spending in Europe. That points to a “perfect storm” closing in on the luxury goods industry, Exane BNP Paribas analyst Luca Solca wrote in a note this month.
Prada SpA last month forecast the second half of this year will be similar to the first six months, when net income dropped 21 percent and sales rose at the slowest pace in three years. LVMH Moet Hennessy Louis Vuitton SA, whose earnings also fell in the first half, is scheduled to report third-quarter sales later today.
Burberry shares have dropped 6.7 percent in the past year, compared with a 13 percent decline in LVMH.
By Andrew Roberts, Janice Kew; editors: Celeste Perri, Thomas Mulier, Tom Lavell.