Burberry sees slowdown in third quarter revenue growth

17th Jan 2012 07:01

Iconic British luxury brand Burberry was out of favour on Tuesday morning after seeing revenue growth slow down in the third quarter.Revenues totalled £574m in the period, up 21% on an underlying basis from the £480m in the third quarter the year before. Underlying revenue growth in the first half, however, was 30%.Retail sales continued to grow at higher rates than Wholesale and Licensing revenues. Retail sales rose by 23% on an underlying basis and accounted for over 70% of group revenue. Average retail selling space increased by 13% in the period; this is expected to be maintained in the second half.Meanwhile, underlying Wholesale and Licensing revenues rose by 15% and 12% year-on-year.According to Chief Executive Officer Angela Ahrendts, "Our investment in flagship markets and digital technology has enabled our global teams to continue to drive customer engagement, enhance retail disciplines and improve operational effectiveness, further strengthening brand momentum."Shares fell 3.46% to 1,255p to lead the fallers on the FTSE 100 in early trading. The negative reaction to the group's statement comes in spite of Chinese gross domestic product data coming in better than expected. China - a key growth market for Burberry - expanded by 8.9% year-on-year, less than the 9.1% rise seen in the third quarter but well ahead of the 8.6% forecast.Nomura published a positive research note on the stock this morning, saying that third quarter trading was strong, with "brand momentum intact". "Burberry is well positioned to accelerate investment and space growth, while defending comp store sales through product development, flagship market investment and innovative marketing," analysts said.BC