LONDON -- Mulberry (LSE:MUL) this morning announced that revenue and pre-tax profit for the year ending March 31 are expected to be below previous market expectations, sending the shares crashing 16% as of 9 a.m. EDT.
Despite seeing retail sales over Christmas in line with expections, the English luxury goods retailer blamed the shortfall on weaker-than-anticipated trading conditions after the festive period -- including reduced tourist spending in London stores -- and lower-than-expected in-season ordering.
This means that wholesale sales for the year are now expected to be down approximately 15% compared with the year ending March 31, 2012, while revenue and pre-tax profit are expected to come in around 165 million pounds and 26 million pounds, respectively. However, management said the order book for autumn/winter 2013 was building "satisfactorily."
Chief executive officer Bruno Guillon commented:
After three years of rapid growth, Mulberry has experienced a year of consolidation while we build the foundations for future growth. We are focused upon optimising the distribution network and adapting our tactical marketing strategy to drive international brand awareness. We continue to reinforce Mulberry's luxury positioning through an enhanced focus on creativity, craftsmanship and quality.
Mulberry had previously seen success off the back of the rise of the emerging middle class in China, with luxury goods competitor Burberry also performing well. With the shares currently standing at 1,035 pence, some contrarian investors may view today's price crash as a buying opportunity. Indeed, the shares have increased more than 17-fold in the last five years since 2009's low of 60 pence!
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