Luxury retailer Mulberry has projected weaker-than-expected sales and profit for fiscal year 2012/2013 due to sluggish post-Christmas trading on lower tourist spending in London stores.
The luxury brand known for its handbags such as the 'Bayswater' and 'Alexa' said it currently expects pre-tax profit in the region of £26m ($40m, €31m) and revenues around £165m for the year ending on 31 March. Analysts polled by Reuters expect pre-tax profit of £31.2m and revenue of £177.4m on average. The company projects retail like-for-like growth of nearly 6 percent for the year.
In the previous fiscal year, Mulberry generated a pre-tax profit of £36m.
Following the news, the company stock shed more than 19 percent in the morning trade, and is trading at 1,020 pence, down 17.41 percent, as at 10.30 am. Mulberry's shares have dropped 36 percent over the past year, lowering the company's market value to £736m.
"Retail sales over the Christmas period were generally in line with expectations. However, trading across the retail portfolio during the last 10 weeks has been disappointing, including a reduction in tourist spending in the London stores," the company said in a filing to the London Stock Exchange.
Additionally, yearly wholesale sales are projected to be down about 15 percent due to the ongoing "channel rationalisation" and "lower than expected in-season ordering".
Despite the weak sales, order book for Autumn/Winter 2013 is building in line with expectations, Mulberry said.
"After three years of rapid growth, Mulberry has experienced a year of consolidation whilst we build the foundations for future growth," CEO Bruno Guillon said commenting on the trading results.
"We are focused upon optimising the distribution network and adapting our tactical marketing strategy to drive international brand awareness."
Earlier in October, the company issued a profit warning on the back of lower-than-expected international retail sales and a shortfall on wholesale revenue.