Shares of upmarket handbags and leather accessories firm Mulberry went into freefall after it said revenue growth for the year to March 30th 2013 is expected to fall below market expectations.
The retailer blamed weaker than expected international retail sales and as wholesale revenue fell behind expectations.
"As a result of this, combined with the previously highlighted investment being made in international retail expansion, we now expect full year profits to be below last year," the group said.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Wholesale shipments fell 4% compared to the same period last year, partly because of more cautious ordering by franchise partners amid a challenging external environment in Asia.
Retail sales increased 13% from the year before. UK retail sales were up 10% while international retail sales, which account for a small part of the business, rose 41%, lower than expectations for the first half of the year.
Mulberry said: "We remain confident in our international expansion strategy and have recently opened stores in San Francisco, Washington DC, Berlin and Frankfurt Airport."
"The business continues to be strongly profitable and generate significant cash to fund our future expansion."
Total revenue rose 6% to £76.5m in the six months to September 30th while retail revenue gained 13% to £46.5m. Like-for-like increased 7%.
Wholesale shipments to third parties dropped 4% to £30m.
CJ
-
Lloyds Bank closures to hit nearly 300 in 2025Lloyds Bank is to close its doors to another 55 branches next year. Which ones are closing?
-
Which British stocks offer the best quality and growth?A professional investor highlights British stocks that hit the sweet spot. This week, Alexandra Jackson, manager of Rathbone UK Opportunities Fund, picks three favourites
