Burberry sales on the rise despite China slowdown

The firm, which recently revealed plans to bring 1,000 jobs to Leeds, had seen weaker performance in the second quarter when they were dented by a slowdown in China and Hong Kong.

Burberry, which is famous for its trench coats and cashmere scarves, also reported a better-than-expected three per cent rise in first half underlying profit, helped by costs savings.

Last month Burberry missed first half sales growth forecasts and warned of an increasingly challenging environment for luxury goods, particularly in China and Hong Kong, hammering its shares to a near three-year low.

It made an adjusted pretax profit of £153m in the six months to September 30, on flat revenue of £1.11bn.

The profit outcome was ahead of analysts’ consensus forecast of £147m.

“This robust performance reflects decisive action as the external environment became more challenging in key markets over the period,” said Christopher Bailey, chief creative and chief executive officer.

He said the firm was “confident in our strongest-ever festive plans and emphasis on productivity and efficiency.”

Burberry ended the half with net cash of £459m and is paying an interim dividend of 10.2p, up five per cent.

The firm now expects no material benefit to retail/wholesale profit for the full 2015-16 year from currency moves, having previously guided to a £10m benefit.

Shares in Burberry, down a quarter over the last six months, closed Wednesday at 1,335p, valuing the business at £5.9bn.