Shares in Burberry have fallen after it revealed a sales hit caused by the absence of free-spending tourists snapping up its luxury goods.
That left half-year store sales in the brand’s Europe, Middle East, India and Africa region – half of which typically come from overseas visitors – 31% lower than pre-pandemic levels.
Japan was affected by similar issues with tourist numbers down as it battled COVID-19 outbreaks and imposed travel restrictions following the Olympics, Burberry said.
The slump was offset by double-digit growth in other parts of the world including China, where demand rose 30% despite being affected by regional lockdowns and extreme weather in August, and the Americas, where sales climbed 38%.
It meant that overall comparable store sales in the six months to 25 September were up by just 1% on pre-pandemic levels.
Pre-tax profits more than doubled to £191m from £73m a year ago and were roughly in line with the £193m bottom line figure two years ago before COVID-19.
But shares in the UK-based group fell as much as 10% in early trading though they later pared some of their losses.
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The results come after Burberry, known for its trench coats and check design, recently revealed that it had poached Versace boss Jonathan Akeroyd to be its new chief executive – and he is due to start next April.
Russ Mould, investment director at AJ Bell, said: “Historically Burberry has been heavily reliant, particularly in terms of European sales, on Asian tourists buying items as part of their trip, whether that be in airport concessions or stores in popular destinations.
“With travel still restricted and some people reluctant to jet off on holiday in the same way they used to, this part of Burberry’s business is really struggling.
“Burberry’s weak performance here is detracting from an otherwise robust contribution from Asia Pacific and the Americas in particular.”