Fashion label Burberry 'robust' as European sales grow
Luxury fashion label Burberry said it enjoyed a "robust" second half boosted by strong demand in American and European markets but saw a weaker performance in the Far East.
The group said total revenues of £1.42bn for the six months to the end of March were ahead by 9% on an underlying basis.
Its stores saw comparable sales up 9%, amid strong demand for the latest versions of its signature trench coats and scarves as well as "exceptional growth" for Burberry's range of ponchos.
Retail saw double digit growth in the Americas and Europe, Middle East, India and Africa region but low single digit growth in Asia Pacific, including "further deceleration" in its high-margin Hong Kong market.
Burberry said digital sales "again outperformed in all regions".
Wholesale revenues were unchanged at £331m, with beauty products, including the My Burberry perfume, ahead, while excluding beauty there was a decline.
Chief executive Christopher Bailey said: "We are pleased to report a robust second half performance, despite an uncertain external environment.
"Customers responded strongly to product innovation, especially in our core British-made heritage trench coats and scarves, while we continued to invest in digital and retail initiatives, including flagship openings in Los Angeles and Japan.
"We anticipate external challenges will continue in the current year, but remain confident in our long-term strategy to build the Burberry brand and business globally."
Burberry said new openings would help contribute low single digit retail revenue growth in the current year but licensing revenues would fall by about 40% due to a planned expiry of a licence in Japan.
The London-based business, founded in 1856, had 214 retail stores, 213 concessions, 57 outlets and 67 franchise stores at the end of the period.
Shares rose nearly 3% in early trading but later edged back.
The stock has risen by about 25% over the last year.
Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said Burberry "remains in fashion" despite "blots on the landscape" such as Hong Kong.
"The overall picture is extremely healthy - the strength of the digital contribution, particular product growth in the likes of the iconic trench coats and scarves and pleasing performances from the Americas and most of Europe," he added.
"In addition, the company is well positioned for future, selective growth in terms of both stores and lines, such as beauty."