- Retail revenues total 528m pounds in Q3
- Comparable sales growth beats forecasts
- Asia Pacific drives sales
Iconic fashion brand Burberry impressed the market with its third-quarter statement on Wednesday as strong growth in its key region of Asia Pacific pushed sales past expectations.
The British luxury group reported a 14% jump in retail revenue to £528m in the three months to December 31st 2013, down slightly from the 17% growth recorded the preceding quarter but ahead of the 13% increase predicted by analysts.
"Burberry numbers should be very well received today," according to analysts at Credit Suisse.
Asia Pacific was the standout performer in terms of regions, delivering double-digit percentage comparable sales growth, led by Greater China and a continued improvement in Korea.
Growth in Europe, Middle East, India and Africa slowed from "double-digit" to "mid to high single-digit", with Americas growth remaining in the mid to high single-digit range. The performance was reportedly "robust" in the UK, France and Germany, while Italy remained "weak".
In terms of products, growth was helped by continued strength in its menswear ranges as well as a strong performance from coats, jackets and large leather goods. While footfall in store remained weak - consistent with previous periods - traffic grew online which "reflect[s] evolving consumer behaviour", it said.
Burberry's comparable sales - an underlying measure of sales from stores open for longer than a year - grew by 12%, down from 13% in the second quarter but well ahead of the expected 8% increase.
Credit Suisse said that the better-than-expected results were "delivered against a mixed operating environment for the luxury sector and a tougher comparison base fuelled by double-digit comps growth in Asia".
Chief Executive Officer (CEO) Angela Ahrendts, whose resignation announcement in October wiped over £500m off the company's value, said she was "pleased" with Burberry's performance during the "all-important festive period".
She said the results reflected continuing strong brand momentum and the company's famously intense focus on retail execution, supported by planned increases in investment in its marketing, customer service and retail estate.
Tipped by UBS as a likely takeover target this year, Burberry opened five stores, including two in China and a first 'Beauty Box' outlet in London's Covent Garden.
"Burberry stock has lost ground since CEO Angela Ahrendts announced her move to Apple back in October, but she will certainly be leaving the company in good shape with today's update," said Toby Morris, Senior Sales Trader at CMC Markets.
"The transition period for incoming CEO Christopher Bailey has clearly been a success, but the real scrutiny will come mid-way through 2014 when he takes the reins on his own," Morris added.
Burberry's share price was 4.4% higher at 1,534p by the close on Wednesday.