Burberry Sales Grow 14%, But Stock Price Slips

Investors are a little nervous about the difficult retail environment the brand is facing.
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Eliza Brooke
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Investors are a little nervous about the difficult retail environment the brand is facing.
Jourdan Dunn walks Burberry's spring 2015 show. Photo: Gareth Cattermole/Getty Images

Jourdan Dunn walks Burberry's spring 2015 show. Photo: Gareth Cattermole/Getty Images

Following a strong fall collection and the launch of its latest fragrance, Burberry announced Tuesday that revenue for the six months ending September 30 jumped 14 percent, to roughly $1.75 billion. While the overall growth was solid, stock prices dropped 6 percent that same morning on CEO Christopher Bailey's admission that the luxury brand is facing a tough retail environment at the moment. (Shares are currently hovering around 4 percent below the market open price.)

The evidence? Slowing same-store sales. While comparable sales were up 12 percent the first quarter -- in line with expectations and equal to the growth rate at which Burberry closed out 2013 -- they dropped to 8 percent in the second quarter. Comparable sales softened particularly in China during that time, owing to an overall drop in demand for luxury goods in the region.

Burberry Beauty, meanwhile, is still growing at a nice clip. Wholesale revenue was up 55 percent, thanks in part to the launch of the trench-inspired "My Burberry" perfume in September. Of course, that success was undoubtedly enabled in large part by the choice of megawatt campaign models Cara Delevingne and Kate Moss.

We'll be watching to see how Burberry fares during, as Bailey puts it, "the all-important festive periods" -- the holiday season, to us Americans.

Homepage photo: Burberry

Note: This article was amended to reflect that Burberry's stock price fell 6 percent Tuesday morning, not 12 percent.