Burberry has said that, despite a reasonably strong festive season, it expects exchange headwinds to affect its second half results.
The high-end fashion store has posted a 12 per cent rise in comparable sales for the last three months of 2013, with retail revenue up 14 per cent to £528m.
Nomura analysts had expected sales to be up 13 per cent.
Despite investor worries that waning sales in China would slow growth for the retailer, as demand for luxury goods falls, the country led double-digit growth in Asia Pacific.
Burberry also said that its digital offering saw a much stronger performance over the period when compared to the traditional store: "Traffic remained weak offline but grew online, reflecting evolving consumer behaviour."
Later this year, the company will welcome incoming chief executive (CEO) Christopher Bailey, who is due to take over from long-time CEO Angela Ahrendts. The positive Christmas results will provide a bolster to Ahrendts' swansong, and Burberry's share price. This morning, shares are trading up six per cent at £15.60p:
Analysts have been concerned about exchange headwinds impacting results, with Nomura cutting its full year profit forecast by £6m to £464m last week. Ahrendts commented in the statement this morning:
At current levels, exchange rates will be a significant headwind in the second half and beyond, and the macro environment remains uncertain, but we are confident that our proven strategies will continue to deliver long-term value for shareholders.
Over the full year 2013, Burberry achieved an operating margin of 17.1 per cent. When it comes to the year ahead, it said:
For the full year 2014, [we] continue to aim for a modest increase from that level, although there will be a dilutive impact from Beauty in this transitional year.