Burberry set to report strong growth

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LUXURY goods retailer Burberry’s run of strong growth due to Asian and online sales should continue when it posts a half-year update on Tuesday.

Brokers at Nomura are forecasting a nine per cent sales lift for the second quarter of the financial year from a 12 per cent rise in the previous quarter – a slower rate but still enviable for a retailer. The broker expects difficult trading conditions in Europe will be a key factor in the weaker sales rate at the brand known for its classic trench coats.

An easing in the strength of the pound is likely to benefit Burberry by between £10m and £15m in the second half of the year, Nomura added.

This is in contrast to earlier in the year when sterling was close to six-year highs against the dollar and Burberry warned this would lead to a £55m hit on profits compared with the previous financial year.

Apart from strong sales across large parts of its Asian business, online sales are expected to continue to offset declining footfall at its stores.

Bank of America Merrill Lynch said in a statement: “Burberry online sales are delivering significant growth.”

The company’s strong online performance has continued under Halifax-born chief executive Christopher Bailey, who was appointed earlier this year.