LONDON — Burberry stopped short of issuing a sales and profit warning last Friday, but now Morgan Stanley has done it for them.
On Tuesday the bank wrote a research note that Burberry’s comments about the impact of the coronavirus “might imply” a downgrade to 2019-20 earnings in the region of 5 percent.
The bank pointed out that Burberry is the soft luxury company with the highest retail sales exposure to Chinese nationals, and was the first of its peers to issue an official warning about the material impact of the coronavirus on its operations in mainland China and Hong Kong.
Some 40 percent of Burberry’s sales come from Chinese customers buying both at home and abroad.
As reported on Feb. 7 Burberry said 24 of its 64 stores in mainland China were closed, with the remainder operating with reduced hours and “seeing significant footfall declines.”
Burberry added that the spending patterns of Chinese customers in Europe and other tourist destinations have been less impacted to date, “but given widening travel restrictions, we anticipate these to worsen over the coming weeks.”
Morgan Stanley is assuming the ongoing disruption will cause a 50 percent to 60 percent drop in Burberry’s sales to Chinese nationals over the coming two
On Tuesday the bank wrote a research note that Burberry’s comments about the impact of the coronavirus “might imply” a downgrade to 2019-20 earnings in the region of 5 percent.
The bank pointed out that Burberry is the soft luxury company with the highest retail sales exposure to Chinese nationals, and was the first of its peers to issue an official warning about the material impact of the coronavirus on its operations in mainland China and Hong Kong.
Some 40 percent of Burberry’s sales come from Chinese customers buying both at home and abroad.
As reported on Feb. 7 Burberry said 24 of its 64 stores in mainland China were closed, with the remainder operating with reduced hours and “seeing significant footfall declines.”
Burberry added that the spending patterns of Chinese customers in Europe and other tourist destinations have been less impacted to date, “but given widening travel restrictions, we anticipate these to worsen over the coming weeks.”
Morgan Stanley is assuming the ongoing disruption will cause a 50 percent to 60 percent drop in Burberry’s sales to Chinese nationals over the coming two
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