luxury group Burberry expects full-year profit to reach the top half of analysts’ forecasts, after a 21 per cent rise in first-half revenue boosted by strong sales of coats and leather goods in China and Europe.
The 154-year-old maker of raincoats and handbags, shortlisted in this year’s CityA.M’s inaugural awards, said its expansion in stronger growing emerging markets, coupled with a surge in tourism from countries such as China, would help it cope with austerity cuts being implemented in developing economies.
Burberry shares, up around 75 per cent this year, fell 3 per cent as some analysts questioned whether the small profit upgrade was enough to sustain recent gains. “While we see upside risks from a long-term, growth story, we believe the short-term positive newsflow is largely priced in,” said Citi analyst Thomas Chauvet.
Burberry said revenue rose 12 per cent at constant exchange rates to £359m in the three months to 30 September, excluding its restructuring Spanish business.
That was up from £282m in the first quarter. Growth was driven by strong demand in China, Hong Kong, Britain, Italy and France, with many of these markets benefiting from a rise in tourist travel.
City A.M. Reporter