Shares in Burberry jumped more than five per cent this morning after the luxury retailer reported it is on track to meet expectations despite political disruption in Hong Kong, which contributed to a slump in sales in one of the retailer’s core markets.
Burberry increased revenue by three per cent to £1.3bn in the first half of the year.
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Profit before tax increased 11 per cent from £174m to £193m.
Earnings per share were 36.4p, up from 31.6p the previous year.
Burberry increased its dividend by three per cent to 11.3p.
Why it’s interesting
The British fashion brand is in the middle of a transformation plan focused on strengthening its position in the luxury market.
Burberry said new products designed by Ricardo Tisci has boosted sales, offsetting the effect of “considerable disruption” in Hong Kong where sales plunged.
However, sales in mainland China, Korea and Japan increased, along with the UK, Europe and the US.
Steve Miley, senior market analyst at Asktraders.com, said: “Burberry’s designer Ricardo Tisci’s new collections have proved to be a hit helping Burberry through an otherwise difficult trading environment.
“Despite political disruption in the key market hub Hong Kong which experienced double digit decline in sales, an economic slowdown in China, and Brexit uncertainty Burberry is still on track to meet full year expectations.
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“The strategy of moving Burberry further upmarket in the luxury segment is paying off.”
What Burberry said
Chief executive Marco Gobbetti said: “We are pleased with our performance in the half, as we remain on track to deliver the first phase of our strategy. New product now represents a high proportion of our assortment and the customer response has been positive delivering strong double digit growth.
“We also continued to strengthen momentum around our brand and transform our distribution. We delivered financial results in line with guidance despite the decline in Hong Kong and we confirm our outlook for FY 2020.”
Main image credit: Getty