Burberry gives fresh boost for luxury sales

(iStock)
(iStock)

London - British trench coat maker Burberry Group reported estimate-beating revenue as Asia Pacific returned to growth, the second positive sign in a week for Europe’s struggling luxury-goods industry.

Third-quarter retail revenue rose 4% on a currency-neutral basis, the London-based company said on Wednesday, compared with the median analyst estimate for a 3% gain.

Bags were particularly strong after Burberry introduced products such as the Bridle model, which sells for up to £16 000.

The results will bolster optimism that the luxury business may have bottomed out after Cartier owner Richemont reported a return to growth last week.

Burberry said its Asia Pacific division had a sales gain in the low single digits, marking a rebound for its largest unit which has been struggling for growth against a backdrop of weaker demand.

The stock rose 0.2% to 1 596 pence at 9:30 in London.

Highlights of the quarter included a record number of views of the company’s Christmas ad and strong demand for new products, chief executive officer Christopher Bailey said in a statement.

Bailey is due to hand over the reins to Marco Gobbetti in July and will return to steering Burberry’s creative direction as part of a management re-shuffle that also includes a new finance chief, Julie Brown, who started on the job on Wednesday.

Total sales of £735m topped the £721m estimate UK comparable sales rose about 40% as the pound’s weakness after the Brexit referendum boosted tourist spending.

Mainland China had high single-digit percentage comparable sales growth, Hong Kong improved to low single-digit percentage decline Americas showed low single-digit percentage decline.

No change to guidance for retail, wholesale and licensing revenue Company expects full-year pre-tax profit to be in line with market expectations.

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