11th Nov 2021 10:46
(Alliance News) - Shares in Burberry Group PLC fell on Thursday morning on fears that sales at the fashion house's high-growth market of China will be hurt by regional lockdowns in the second half.
Burberry shares were down 5.3% to 1,862.50 pence each in London on Thursday.
For the 26 weeks to September 25, operating profit surged to GBP207 million from GBP88 million, and pretax profit more than doubled to GBP191 million from GBP73 million.
Revenue jumped 38% to GBP1.21 billion from GBP878 million last year.
"We have made strong progress in the half. Full-price sales are growing at a double-digit percentage, driving margin expansion and strong free cash generation. We are seeing an acceleration in performance in countries less impacted by travel restrictions and we remain confident of achieving our medium-term goals," Chair Gerry Murphy said.
Burberry declared an interim payout of 11.6p per share having paid none in the prior year due to the pandemic.
Looking ahead, Burberry maintained medium-term guidance for high single-digit top line growth.
interactive investor's Richard Hunter said: "The initial share price reaction to the numbers reflect a weakening of sales during the second quarter, even though numbers for the first-half as a whole are in comfortably positive territory, and generally high expectations.
"The move takes some sheen from a share price which had risen by 22% over the last year, as compared to a hike of 15% for the wider FTSE 100, although yet to regain pre-pandemic levels, having dipped by 4% over the last two years."
Regionally, full-price sales almost doubled in the Americas, South Korea grew almost 80%. Mainland China lagged in comparison, but was still up over 40% as wide-reaching regional lockdowns and extreme weather impacted the performance in August in particular.
By Greg Roxburgh; [email protected]
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