(Bloomberg) -- Burberry Group Plc reported a slight drop in second-half revenue as terrorist attacks in Europe weighed on tourist spending, increasing the pressure on Chief Executive Officer Christopher Bailey.
Sales fell 1 percent to 1.41 billion pounds ($2 billion) in the six months through March, London-based Burberry said in a statement Thursday. Analysts predicted 1.42 billion pounds, according to the median of 17 estimates. The external business climate remains “challenging,” Bailey said, forecasting a 10 percent drop in revenue at the company’s wholesale unit in the first half of this year.
Burberry’s shares have rallied since mid-January amid renewed takeover speculation and after Bailey announced plans to shake up the fashion calendar. Yet the company says profit will probably fall for a second straight year on weakening demand in Asia, which has prompted it to scale back in Hong Kong.
Adding to the struggles Burberry and Bailey are facing, tourist spending in Europe has fallen following the terrorist attacks in the region. Trends haven’t improved in France since November and it’s going to take a few more months to normalize, LVMH Moet Hennessy Louis Vuitton SE said Tuesday. Burberry is cutting management bonuses to protect margins, which analysts see narrowing for a third year.
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