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LONDON—Burberry Group PLC said its comparable sales declined in the first quarter as the British fashion house was hit by broad-based weakness in all its major regions.

The continued declines—coming after a difficult year in which Burberry reeled from the impact of a spending slowdown in Greater China—follow a major management shake-up announced Monday in which the company named luxury veteran Marco Gobbetti to replace Christopher Bailey as chief executive and said it was replacing chief financial officer Carol Fairweather with Julie Brown, the CFO of medical technology business Smith and Nephew PLC.

On Wednesday, Burberry reported that underlying retail revenue was flat at £ 423 million ($563 million) in the fiscal first quarter ended June 30 compared with a year earlier. Same-store sales declined 3% in the fiscal first quarter, a marked slowdown from the 6% growth reported for the same period last year but ahead of consensus analyst estimates for a 5% decline.

Burberry now expects wholesale revenue in the six months ending Sept. 30 to be down by over 10% from last year, a deterioration from May guidance in which Burberry said it expected a decline of around 10%.

The company described the external environment as "challenging," saying cost inflation pressures had persisted.

But Burberry's results are expected to see a boost following Britain's vote to leave the European Union since the company makes 90% of its sales outside the U.K., in currencies such as the dollar and the yuan against which the pound has slumped.

Burberry on Wednesday said it now expects a higher benefit from exchange rates for fiscal 2017, with an adjusted retail and wholesale profit boost of £ 90 million, which is higher than the expected benefit outlined in May.

Mr. Bailey said the recent management changes, along with steps Burberry has taken since concluding a strategic review of its business in May, "gives us real confidence for the future."

Burberry in May said it would work to save at least £ 100 million a year by fiscal 2019 by reducing complexity, simplifying processes and eliminating duplication in its operations. Burberry's operating expenses are close to 500 basis points higher than its peers according to UBS, with the company hiring about 15% more sales staff.

Mr. Bailey will become Burberry's president and chief creative officer sometime next year, reporting to Chairman John Peace and working with Mr. Gobbetti on strategy alongside his regular design duties. Ms. Fairweather will step down from Burberry's board by the end of January and will leave the company by March to make way for Ms. Brown.

Burberry said it now plans to start the £ 150 million share buyback it announced in May.

The Asia Pacific region, Burberry's largest by revenue, has suffered a slowdown over the past year as the Chinese government has continued to crack down on corruption while unrest in Hong Kong—previously a popular destination for Chinese shoppers—has led to a slump in tourist spending there and in Macau.

The company on Wednesday reported a double-digit percentage decline in comparable sales in Hong Kong and said comparable sales in mainland China were roughly flat.

Analysts expect the company to see spending pick up in the key market of mainland China after the Chinese government in April raised taxes on overseas purchases, implemented stricture customs controls and hiked taxes for the postal items used by so-called "Daigous"—professional overseas shoppers.

Meanwhile until the luxury brand hikes prices, the weak pound should make Burberry's home market, Britain, an attractive destination for overseas shoppers.

Burberry said its sales in the U.K. improved in the final weeks of the quarter to log mid-single-digit percentage comparable growth but the company was hit by double-digit declines in sales to traveling luxury customers in places like France and Italy.

In the U.S., Burberry said it continued to see "uneven demand," and that spending from tourists remained down by a double-digit percentage.

Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com

(END) Dow Jones Newswires

July 13, 2016 04:05 ET (08:05 GMT)

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