British luxury goods group fashion label Burberry smashed third quarter revenue forecasts and predicted annual profit towards top of market expectations, adding to evidence that the rich are spending again.
The 154-year-old maker of upmarket raincoats and handbags was reported by Reuters as saying that it expected further profit growth in 2010-11.
Luxury goods firms have been hard in the recession but Burberry has coped better than most because it reacted quickly by slashing costs, and jobs as well as its stock and range.
The group, known for its camel, red and black check, said underlying revenue increased 12 per cent to 380 million pounds (624 million USD) in the three months ended December 31.
That compared with analysts’ consensus forecast for a rise of 3 percent, according to a company poll of 12, and a first-half decline of 5 percent.
Shares in Burberry, which have nearly trebled over the last year, closed at 599.5 pence on Jan. 18, valuing the business at 2.6 billion pounds.
Burberry said retail sales rose an underlying 16 percent, with growth in all regions led by Europe and Asia Pacific, while wholesale revenue increased an underlying 5 percent, driven by earlier and more frequent deliveries.
The firm raised its wholesale guidance for the second-half to down between 10 and 12 percent from at constant currency down 15 per cent previously.
“Burberry has delivered a strong performance in both retail and wholesale, as customer around the world responded positively to our collections, marketing and service initiatives,” said Chief Executive Angela Ahrendts.
“As a result we currently expect adjusted profit before tax for this financial year to be towards the top end of market expectations.”
Prior to Jan. 19’s update, analysts were forecasting a consensus underlying pretax profit of 188 million pounds for the year to end-March 2010, according to Thomson Reuters, up from 175 million pounds in the previous year./.
The 154-year-old maker of upmarket raincoats and handbags was reported by Reuters as saying that it expected further profit growth in 2010-11.
Luxury goods firms have been hard in the recession but Burberry has coped better than most because it reacted quickly by slashing costs, and jobs as well as its stock and range.
The group, known for its camel, red and black check, said underlying revenue increased 12 per cent to 380 million pounds (624 million USD) in the three months ended December 31.
That compared with analysts’ consensus forecast for a rise of 3 percent, according to a company poll of 12, and a first-half decline of 5 percent.
Shares in Burberry, which have nearly trebled over the last year, closed at 599.5 pence on Jan. 18, valuing the business at 2.6 billion pounds.
Burberry said retail sales rose an underlying 16 percent, with growth in all regions led by Europe and Asia Pacific, while wholesale revenue increased an underlying 5 percent, driven by earlier and more frequent deliveries.
The firm raised its wholesale guidance for the second-half to down between 10 and 12 percent from at constant currency down 15 per cent previously.
“Burberry has delivered a strong performance in both retail and wholesale, as customer around the world responded positively to our collections, marketing and service initiatives,” said Chief Executive Angela Ahrendts.
“As a result we currently expect adjusted profit before tax for this financial year to be towards the top end of market expectations.”
Prior to Jan. 19’s update, analysts were forecasting a consensus underlying pretax profit of 188 million pounds for the year to end-March 2010, according to Thomson Reuters, up from 175 million pounds in the previous year./.
