# Burberry shares drop as weak US demand overshadows China rebound
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-05-18
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Burberry shares drop as US demand weakens
Meta Description: Burberry reports strong Q4 sales with China rebound but US weakness causes shares to fall. Company maintains targets amidst global uncertainty.
URL: https://financedigest.com/burberry-shares-drop-as-weak-us-demand-overshadows-china-reboundhtml

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# Burberry shares drop as weak US demand overshadows China rebound

By Suban Abdulla

LONDON (Reuters) -British luxury fashion brand Burberry on Thursday reported stronger-than-expected fourth quarter sales driven by a rebound in China but continued weakness in the United States sent its shares down sharply.

Comparable store sales at the FTSE 100 group rose 16%, accelerating from 1% in the third quarter and above a company compiled consensus of 14%, with sales in its biggest market China rising 13% in the three months to April 1.

China, which is showing signs of recovery after it dropped strict [COVID-19 restrictions](https://www.financedigest.com/factbox-britain-scraps-all-remaining-covid-19-restrictions.html "Factbox-Britain scraps all remaining COVID-19 restrictions"), accounted for 30% of the business.

But shares in the group were down 6.2% in early trading after the Americas continued to be a [weak spot](https://www.financedigest.com/dont-be-weak-in-spotting-vulnerability.html "Don’t be weak in spotting vulnerability"), with quarterly sales declining 7% in Q4. It also maintained its 2024 and medium-term targets while stating it was “mindful of macroeconomic and geopolitical environment”.

Burberry [shares had hit record](https://www.financedigest.com/credit-suisse-shares-hit-record-low-after-report-bank-is-looking-to-raise-cash.html "Credit Suisse shares hit record low after report bank is looking to raise cash") highs in recent months on the back of optimism over the recovery in China.

[Chief executive Jonathan Akeroyd said the financial performance was supported](https://www.financedigest.com/watchdogs-new-chief-says-high-prices-can-support-greener-palm-oil.html "Watchdog’s new chief says high prices can support greener palm oil") by a recovery in Mainland China and “good progress” in Burberry’s core leather goods and outwear offerings.

Europe performed strongly, with [sales up 27% in the period](https://www.financedigest.com/automotive-body-in-white-sales-at-3-4-cagr-over-the-forecast-period-from-2021-to-2031-reaching-us-59-7-billion-in-2021.html "Automotive Body in White sales at 3.4% CAGR over the forecast period from 2021 to 2031, reaching US$ 59.7 billion in 2021"), helped by a rise in tourists from the Middle East and Americas.

Thursday’s results follow creative director Daniel Lee’s first collection at [London Fashion week](https://www.financedigest.com/catwalk-shows-return-at-hybrid-london-fashion-week.html "Catwalk shows return at hybrid London Fashion Week") in February as well as the launch of a new logo and campaign.

The company said a new collection, which includes new shoes and bags, will land in [stores and online](https://www.financedigest.com/from-in-store-to-online-how-the-pandemic-affected-consumer-behaviour.html "From in Store to Online: How the Pandemic affected Consumer Behaviour") in September.

Leather goods [sales were up 12% in the 2023 financial year and 15% higher in the final quarter](https://www.financedigest.com/uk-new-car-sales-up-by-nearly-a-quarter-in-october-smmt.html "UK new car sales up by nearly a quarter in October – SMMT"), boosted by sales in the Lola and Frances women’s bags as well as the launch of the vintage Burberry Check line.

Full year revenues at the 167-year-old business rose 7% to 3.1 [billion pounds](https://www.financedigest.com/edf-delays-uk-nuclear-project-to-2027-ups-price-by-3-billion-pounds.html "EDF delays UK nuclear project to 2027, ups price by 3 billion pounds") ($3.91 billion), in line with expectations, and up from to 2.83 billion a year ago.

Burberry’s luxury rivals LVMH and Hermes have also reported a bounce in first quarter [sales due to a recovery in China and wider Asian markets](https://www.financedigest.com/kids-oral-care-products-market-sale-is-anticipated-to-boost-with-tremendous-growth-by-2030-due-to-health-awareness-of-kids.html "Kids Oral Care Products Market Sale Is Anticipated To Boost With Tremendous Growth By 2030 Due To Health Awareness Of Kids").

($1 = 0.7923 pounds)

(Reporting by Suban Abdulla; editing by James Davey and Kate Holton)


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