LONDON (AP) — Burberry shares plunged Wednesday after the U.K. luxury goods maker reported disappointing sales figures, with the fall in the pound in particular boosting spending by tourists in Britain.
The company said that sales in the second half of its fiscal year fell 1 percent when stripping out the effect of shifts in currency exchange rates.
While Burberry reported double-digit growth in sales in Europe, it suffered a decline in the Americas. The pound weakened after the U.K. voted to leave the European Union, making Britain an attractive shopping destination for travelers spending dollars and euros.
"U.K. sales continue to surge ahead, as credit-card wielding tourists with expensive tastes flock to these shores to . pick up a currency-induced bargain," said George Salmon, an equity analyst at Hargreaves Lansdown. "However, as ever with currency, there are two sides to the coin. The dollar's strength is holding back sales in the U.S."
Burberry also continued to struggle in Asia, where rising sales in mainland China were offset by declines in Hong Kong and Korea. The company reported a "low single-digit" increase in retail sales from the Asia-Pacific region as a whole.
Burberry shares were down 5.5 percent at 1,608 pence in London, after dropping as much as 7.7 percent in early trading.
Total company revenue rose 14 percent from a year earlier to 1.61 billion pounds ($2.06 billion) in the six months through March 31. That was flattered by shifts in currency values, as revenue made in foreign currencies is boosted in value when translated back into a weaker pound. After eliminating gains from foreign currency fluctuations, sales were down 1 percent.
"In an uncertain environment, we continue to take action to strengthen the brand and reposition Burberry for growth," Chief Executive Christopher Bailey said in a statement.