Hugo Boss has staged a partial recovery thanks to a sales boost in Britain and China.
The German fashion house said its operating profit for 2016 will fall less than expected due to a 20 per cent increase in like-for-like sales in China in the fourth quarter, and a two per cent increase in Europe, which was driven by "robust" growth in the UK.
Hugo Boss' share price climbed nine per cent on the news.
Operating profit is now forecast to fall by between 17 and 23 per cent when Hugo Boss publishes its final results on 9 March.
The business is recovering from a series of profit warnings. In February last year, Hugo Boss' share price plummeted after it said sales in China and the US had been weak.
Luxury brands have been performing particularly well in Britain since the devaluation of the pound. Foreign buyers have been flocking to the UK to snap-up discount designer goods. Burberry said in October that the luxury spending boom could push up its annual profits by £125m.
As a group, Hugo Boss sales fell by one per cent on a currency adjusted basis. In the third quarter, currency-adjusted sales were down six per cent.
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Mark Langer, Hugo Boss' chief executive, said the company's fourth-quarter results showed the group was "on the right track".
"In China, we completed the turnaround in the second half of the year," he said. "In Europe, we held up well in a difficult market environment."
RBC analysts said: "Reintroducing entry price products into retail stores under the Hugo brand should be helpful for volumes, however we still believe that Hugo Boss faces a number of structural challenges in regard to its overall brand and price positioning.
"The U.S. also shows no imminent sign of recovery."