Shares of the U.K.'s largest luxury brand fell as much as 4% in earlier trading, but pared losses and dropped 2.7% in afternoon trading in London. The decline comes after the shares had rallied 69% this year as the luxury goods industry rebounds from its worst year on record. Burberry has been one of the best performers in the past two years.
CEO Angela Ahrendts nonetheless expressed confidence on full-year profit as the company continues to push ahead in China. "Continued product innovation, digital and customer-service initiatives, coupled with the recent acquisition of our Chinese retail operations, underpin our confidence in delivering long-term sustainable growth," Ahrendts said.
Many luxury retailers have been expanding in Asia, and China in particular. Burberry recently completed the acquisition of 50 stores in China and of the 10 stores it plans to open in the second half of its fiscal year, half will be in China.