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
-
Should you invest in UK equities?The FTSE 100 hit a record high this week, but UK equities remain unloved and undervalued compared to their global and US peers. Should you snap them up at a discount?
-
State pension errors: DWP urged to check for mistakes among divorced peopleFormer pensions minister Steve Webb says there are a high number of divorced women on low state pensions. Now MPs want the DWP to check if there were any errors in “potentially underpaying men and women who are divorced”.
