Burberry Sales Suffer From US Decline, Muted Chinese Rebound

Burberry Group Plc sales growth suffered from a decline in sales from the Americas and a smaller-than-expected rebound in China.

(Bloomberg) — Burberry Group Plc sales growth suffered from a decline in sales from the Americas and a smaller-than-expected rebound in China.

Revenue from the Americas dropped 8% at comparable stores on a constant exchange rate basis in the 13 weeks ended July 1, the British company said Friday. A 46% bounce in sales in China was weaker than analysts expected.

The stock fell as much as 1.9% in early London trading.

Burberry Chief Executive Officer Jonathan Akeroyd has been trying to boost the appeal of the brand. He’s hoping Daniel Lee, the new designer who unveiled his debut collection in February, can reinvigorate the popularity of the label by going back to its British roots.

Investors sold off the stock in May after Burberry warned of demand slowing down in the US.

Total same-store sales rose 18%, the fastest pace in two years. The company reiterated its guidance for low double-digit sales growth this year.

Rainwear sold particularly well in the first quarter, as did leather goods including women’s bags, the company said. Burberry refurbished 19 stores during the period and is on track to upgrade more than 50% of stores by the end of the year.

In May, Akeroyd said Lee’s creations will be available in stores from September, and that the reception from wholesalers had been positive.

Akeroyd took over the running of the trench-coat maker more than a year ago. Like his predecessors, he’s seeking to elevate the prestigiousness of Burberry while also boosting revenue by selling more accessories and bags in the long term.

Read More: Burberry Tries to Make Britain Cool Again With Tartan And Whisky

Analysts are increasingly speaking of polarization among luxury groups, distinguishing between a few outperformers such as LVMH Moet Hennessy Louis Vuitton SE and Hermes International and the rest, which will probably lag behind.

Read More: BofA Sees Growing Gap Between Luxury Sector Winners and Losers

(Updates with shares)

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