Designer brand Burberry this morning raised its guidance for the year after a quarter in which the luxury brand saw revenue rise three per cent.
Revenue in the third quarter hit £719m, up from £711m twelve months ago, as the firm’s focus on the far eastern market looked to be paying off.
In response Burberry said it expected full year growth of a low single digit percentage, compared to previous guidance of flat growth.
Shares in the company dropped over three per cent as the FTSE opened.
Marco Gobbetti, the brand’s chief executive, said: “This was another good quarter as new collections delivered strong growth and we continued to shift consumer perceptions of our brand and align the network to our new creative vision.
“While mindful of the uncertain macro-economic environment, we remain confident in our strategy and the outlook for 2020.”
Expanding its presence in China has been a key concern for Burberry, with the designer taking its runway show to Shanghai in April.
This looks set to continue, with plans to open a first store in Shenzhen, in partnership with Tencent, in the first half of its 2021 financial year.
Sales in the Asia Pacific division rose by a low single digit figure, largely driven by a rise of between 10 and 20 per cent in mainland China.
However, continued disruption in Hong Kong due to the ongoing protests halved sales in the contentious region.
CMC Markets analyst David Madden said that fears over the Coronavirus, which has now killed six people, might see the division suffer in the coming months.
Ian Forrest, investment research analyst at The Share Centre, added: “Today’s figures show some improvement in sales and the rollout of the well-received new collections should continue to provide a boost, but slowing global economic growth, protests in Hong Kong and the recent coronavirus outbreak in China remain as challenges for the retailer.”
The firm’s European division grew by a high single digit figure, whilst sales in the Americas were broadly stable.