Burberry's retail operation enjoyed a strong run up to Christmas but the company took a hit in its wholesale division and said the global environment would remain challenging.

The luxury fashion brand said total revenue rose 9% to £613m in the three months to December 31st.

Retail revenue, which makes up the bulk of sales, rose 13% to £464m on an underlying basis, driven by customers choosing more expensive items and by a strong performance in outerwear.

This was a head of consensus forecasts of a 9% rise.

However, wholesale revenue fell by 5% to £120m on an underlying basis in the third quarter.

For the second half of its financial year Burberry now expects underlying wholesale revenue to fall by a low to mid single-digit percentage year-on-year, compared to a previous estimate that it would be broadly unchanged.

The firm said this reflected lower sales to small specialty accounts in Europe.

The United States, Asia Travel Retail and Emerging Markets are expected to continue to grow.

The company, which has struggled to maintain sales in the Far East, saw the Asia Pacific region post the strongest rise in revenues, up 16% to £242m on an underlying basis.

This compared with growth of 4% in Europe and the Americas.

Underlying licensing revenue, at a gain of 4% to £29m, was as expected.

Chief Executive Angela Ahrendts said the firm had benefitted from a particularly strong week in the run up to Christmas.

"In an otherwise difficult quarter, core outerwear, mens and digital all outperformed," she said.

"We expect the external global environment to remain challenging, but see continued opportunities to drive productivity in our existing business, while investing for growth in under-penetrated regions, product categories, channels and mediums."

Analysts at Seymour Pierce highlighted the "undemanding" valuation on which the shares trade, at a forward price-to-earnings multiple of 15.6 times, compared to a peer group average of 17.8 times.

They consider that to be low based on the firm's long term growth prospects, although they admit that given the recent rally in the shares they may consolidate around this area in the short term.


Bikes and car accessories retailer Halfords reported a solid increase in total revenue after a strong performance at its autocentres and said there has been no material change in its financial position.

Total revenue increased 1.6% for the 15 weeks to January 11th 2013 while revenue rose 0.8% for the 41 weeks to January 11th.

Revenue at autocentres for the third quarter rose 12.4% and for the 41 week period increased 15.4%.

Like-for-like retail revenue for the 15 weeks rose 1% after a robust performance from car maintenance, which rose 6.1%.

Travel solutions fell 8.2% after weak sales of child car seats. Car enhancement fell 1% while cycling reduced 1.6% after weak demand for older-kids and adult-mainstream bikes.

Mild and wet weather conditions affected the demand for winter products, it said.

"We do not anticipate a material improvement in short-term trading conditions. Given the Retail revenue performance in the period our plans would indicate group profit before tax for the year ended March 29th 2013 in the range of £68-72m, a modest upgrade to our prior assumptions," it said in a statement.

"We will continue to exit old inventory as we invest for the next financial year."

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