Burberry reports strong sales growth

General view of a Burberry store in Milan, Italy on September 09, 2010.

Story highlights

  • Burberry, the British luxury brand, reported strong sales growth through the festive season
  • Sales in the Asia Pacific region were up by 36 per cent to £210m
  • Sales in Europe grew by 20 per cent to £160m.
High-spending travelling luxury goods consumers continued to shop at Burberry as the British luxury brand reported strong sales growth through the festive season.
Burberry's signature outerwear and leather goods drove half of its total retail growth of 21 per cent to £574m in the three months to December 31, the company said on Tuesday.
Fears of a slowdown in Asia had knocked Burberry's shares by 20 per cent from their peak in July but the company sought to reassure investors by reporting that comparable store sales in China grew by 30 per cent in the quarter.
Sales in the Asia Pacific region were up by 36 per cent to £210m, while sales in Europe grew by 20 per cent to £160m.
Travelling luxury consumers kept spending at flagship stores in London, Paris, Hong Kong and Las Vegas driving like-for-like store sales up by 13 per cent in the period.
Stacey Cartwright, chief financial officer, said: "We've seen a consistent performance along this quarter. Mainline stores actually outperformed outlets."
Looking ahead, Ms Cartwright said that the pending Chinese lunar new year was increasingly important to the company's performance.
She added the company was in line to meet a full-year profit-before-tax of £375m, which has been forecast by analysts.
David Jeary at Investec said the results in China would reassure bears but that growth in the Americas which was up just 4 per cent to £148m looked "a little subdued".
The company said licensing revenue increased by 12 per cent in the third quarter led by a significant 60 per cent growth in its fragrance, eyewear, and watches division.
Ms Cartwright said that, after the successful launch of Burberry Body, a new perfume, the company would now focus on the introduction of sunglasses and watches.
Talks regarding Burberry's licensing agreement with Inter Parfums that began last month continue, Ms Cartwright said, as the company is considering different licensing arrangements, which could potentially include a buy-in.
By mid-morning London-time, shares in the company were down 2.1 per cent to £12.73