Burberry profit rises 14%

UK’s largest luxury-goods maker boosted by strong demand in China and Hong Kong

Burberry, the UK’s largest luxury-goods maker, reported full-year profit that beat analysts’ estimates.

Burberry, the UK’s largest luxury-goods maker, reported full-year profit that beat analysts’ estimates.

Tue, May 21, 2013, 07:45

Burberry, the UK’s largest luxury-goods maker, reported full-year profit that beat analysts’ estimates, boosted by strong demand in China and Hong Kong, and raised its dividend 16 per cent to 29 pence a share.

Adjusted pretax profit advanced 14 per cent to £427.8 million (€506.2 million) in the year through March, London-based Burberry said in a statement today.

Analysts’ predicted £417.5 million, according to the median of six estimates.

The maker of $2,795 trenchcoats said last month that profit would probably be at the top end of estimates after same-store sales rose 7 per cent in the second half.

Earnings may rise to £450 million to £480 million this year even as the global environment remains challenging, Burberry said April 17.

“Our brand momentum, proven strategies and closely connected global team provide confidence in Burberry’s future performance,” chief executive officer Angela Ahrendts said in the statement.

Burberry is expanding retail operations and increasing average prices to target the market for the most expensive goods, which Bain and Co estimates will grow faster than cheaper lines.

While the high end of the luxury market is booming, so- called aspirational shoppers are growing weary of heavily logo-ed products, according to the consultant.

Worldwide luxury sales will rise 4 per cent to 5 per cent this year, excluding currency shifts, Bain estimated last week.

Growth will be sustained as booming demand in Southeast Asia offsets a slowdown in China and Europe, Bain said. Burberry rose 0.5 per cent to 1,463 pence in London trading yesterday. The stock has risen 19 per cent this year.

Bloomberg