A marked slowdown in sales over recent weeks has forced Burberry to issue a surprise profits warning. The City dissected the statement and expressed concern.

“Although they are managing their cost base tightly, this slow down means they are guiding full year pre-tax profit towards the bottom end of the range (£424m-£445m, consensus £433m). However, given the weak run rate approaching the all-important second half and given macro uncertainties there could be some more substantial downgrades.” - Matthew McEachran, Singer

“We understand that the slowdown has been reasonably broad based regionally. The focus internally is to protect profitability and we expect the company to be ‘battening down the hatches’ on non-essential costs. The long-term strategy remains unchanged.” - David Jeary, Investec

“The trend Burberry is talking about may seem at odds with the rest of the sector news of late but we note that this is current news up until September 8 and would not be surprised if other luxury players are seeing similar trends. The recent de-rating of the shares has already started to anticipate a slow down and this slow down is nothing like the brick wall the sector impacted in 2008 when the financial crisis hit. Indeed, Burberry is in a much stronger position, brand and infrastructure-wise, to react to a slow down given recent system investment so is unlikely to have the same stock issue.” - Kate Calvert, Seymour Pierce

“Burberry’s profit warning today signals an abrupt end to the share price momentum that it has enjoyed over the past three years. The retailer has gorged itself on a booming middle class in the Far East but this news today is yet another indication that Chinese consumption, upon which the company is so heavily reliant, is stalling.

“The stock fell a whopping 19% as sellers clambered for the exit fearing that any continued slow down in the Chinese economy will spell even more trouble for the luxury brand. This is especially a concern when your sales growth is only coming from new store openings meaning that in reality sales were flat to negative for the period.” - Angus Campbell, London Capital Group