Pre-tax profits and revenue at Mulberry Group PLC (LON:MUL) below market expectations.
Mulberry (LSE: MUL) this morning announced that revenues and pre-tax profit for the year ending 31 March 2013 are expected to be below previous market expectations -- promptly sending the shares crashing 16.2%, or £2.
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 London stores seeing a reduction in tourist spending -- and lower-than-expected in-season ordering.
This means that wholesale sales for the year are now expected to be down approximately 15% compared to the year ending 31 March 2012, while revenues are expected to come in at approximately £165m and pre-tax profit around £26m. However, management claimed that the order book for Autumn/Winter 2013 is building "satisfactorily".
Chief executive officer Bruno Guillon commented:
"After three years of rapid growth, Mulberry has experienced a year of consolidation whilst 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 1,035p, some contrarian investors may view today's price crash as a buying opportunity. Indeed, the shares have increased over 17-fold in the last five years since 2009's low of 60p!
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> Sam does not own shares in any companies mentioned. The Motley Fool has recommended shares in Burberry.
