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Burberry continues to hurt from luxury slowdown, APAC only bright spot

Burberry said total revenues in the third quarter were down 7 percent to GBP 706 million at reported exchange rates, with Asia-Pacific proving the only growth region for the British brand during the three months.

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Total sales were down 2 percent at constant exchange rates, said the London-based luxury brand,

Comparable stores sales were down 4 percent globally, with Asia-Pacific sales up 3 percent for the three months ending December 30.

Within APAC, mainland China sales grew 8 percent, South Asia Pacific increased 2 percent, and Japan surged 9 percent, partially offset by a 10 percent decrease in South Korea.

Elsewhere, comparable sales in the Americas plummeted 15 percent, while EMEIA revenues fell 5 percent.

“We are continuing to deliver the transition to our new modern British luxury creative expression for Burberry which started appearing in our stores in early Autumn,” said Jonathan Akeroyd, chief executive officer, Burberry.

“We are still in the early stages of executing on this, which has become more challenging against the backdrop of slowing luxury demand. We experienced a further deceleration in our key December trading period and we now expect our full year results to be below our previous guidance.

Looking ahead, Akeroyd said he remains committed to achieving Burberry’s GBP 4 billion revenue ambition. However, with the current slowdown in luxury demand and the impact it is having on trading, Burberry said it now expect adjusted operating profit for the financial year ended March 30, to be in the range of GBP 410 million to GBP 460 million, below its previous guidance.

Back in November, the company had said annual adjusted operating profit could be at the “lower end” of the consensus range of GBP 552 million to GBP 668 million.