Shares Slip After Burberry Declares Deceleration

The sound bites and statistics that are causing a stir in luxury circles, following Burberry’s slowed retail growth and sudden profit-warning

“ As we stated in July, the external environment is becoming more challenging. In this context, second quarter retail sales growth has slowed against historically high comparatives. ”

Angela Ahdrents, CEO, Burberry
Burberry

19%

How much Burberry’s shares slumped following the surprise profit warning.

4Traders

“ Burberry warned that annual profits would be at the bottom end of analysts’ expectations of between £405 million and £445 million, the first major disappointment for European luxury companies. ”

Morgan Stanley Analysts in a note to clients
NYTimes

20%

Coach disappointed in its results. Although the company posted a 12% revenue increase, the market sold 20% of the stock based on the report.

InvestorPlace

“ It may suggest that those who can afford luxury items are starting to snap their wallets shut. These babies can get volatile at the drop of a hat, and Coach’s 20% one-day decline demonstrates this danger. ”

Lawrence Meyers, President, PDL Capital Inc
InvestorPlace

3-4%

In Paris, shares in luxury fashion groups LVMH and PPR slid by 3.82 percent and 3.48 percent, to stand at 127.2 euros and 123.45 euros respectively. The overall French market was down 0.42 percent.

AFP

“ We are tightly managing discretionary costs and taking appropriate actions to protect short term profitability, while continuing to execute on our proven five key strategies. ”

Angela Ahdrents, CEO, Burberry
Burberry

4%

Ralph Lauren might be the next leg of the table to wobble. Revenue was up just 4% and earnings were up 5% in the last quarter, after the company enjoyed double-digit increases for several consecutive quarters.

InvestorPlace

“ We remain of the view that the strategy, luxury positioning and management team should lead to long-term sector outperformance. ”

Investec Securities analyst Bethany Hocking
AFP