Burberry slumps after warning over outlook

20th May 2015 07:09

Shares in luxury retailer Burberry slumped 5% after the company cautioned that it was seeing increased uncertainty in some of its markets and warned over the potential impact of currency movements.Burberry said it now expects earnings in the 12 months through March to be around £40m less than previously estimated due recent sterling strength."Against this background, we will continue to manage our business dynamically - capitalising on the significant opportunities we have by channel, region and product to create long-term shareholder value," said chief creative and chief executive offier Christopher Bailey.The company posted a rise in full-year net profit to £336.3m from £322.5m last year on rising revenue.Revenue increased to £2.52bn from £2.33bn in the same period last year, supported by strength in wholesale and retail, but adjusted pre-tax profit fell to £455.8m from £460.3m.Burberry also said it has raised its full-year dividend to 35.2p, up 10% from 2014.Nomura said in a note that was reducing its forecasts by 5% on the back of the results, pointing to sterling strength.Nevertheless, it said the underlying business remains strong and maintained its 'buy' rating on the stock. "We would use any short-term weakness as an opportunity; however, we note a cautious outlook statement and pricing decisions, which we will watch carefully for short-term read-across."