Fashion firm Burberry has soothed fears about the luxury goods market as it reported better than expected half-year figures.
The group - known for its red, black and camel check - posted a 6% increase in underlying pre-tax profits to £173m, thanks to high-spending luxury consumers offsetting a drop in shop footfall.
Burberry recently spooked investors after warning over profits in September amid concerns that China's demand for its luxury goods was in decline.
The group confirmed that like-for-like sales growth slowed in China over the second quarter, but remained positive, giving it "mid-teens" growth over the six months to September 30.
However, Burberry's decision to start making its own perfumes and cosmetics hit profits on a non-adjusted basis.
Bottom-line figures fell from £158.7m to £111.9m in the first half as it paid £74m as part of a previously announced €181m (£145m) charge to end a licence agreement.
Despite the initial financial blow, Burberry chief executive Angela Ahrendts said the decision to bring perfumes and beauty in-house was a "significant brand and business opportunity" and will boost profits over time.
It is creating a new division for perfumes and cosmetics.
Kate Calvert, retail analyst at Seymour Pierce, said: "This is a reassuring set of results and will help rebuild sentiment towards the shares after its unscheduled trading update in September."
But she said the group's performance over Christmas would be key for full-year performance.