Burberry Gives Fresh Boost to Luxury as Sales Beat Estimates

LONDON, United Kingdom — British trenchcoat maker Burberry Group Plc reported estimate-beating revenue as Asia Pacific returned to growth, the second positive sign in a week for Europe's struggling luxury-goods industry.

Third-quarter retail revenue rose 4 percent on a currency-neutral basis, the London-based company said Wednesday, compared with the median analyst estimate for a 3 percent gain. Bags were particularly strong after Burberry introduced products such as the Bridle model, which sells for up to £16,000 ($19,740).

The results will bolster optimism that the luxury business may have bottomed out after Cartier owner Richemont reported a return to growth last week. Burberry said its Asia Pacific division had a sales gain in the low single digits, marking a rebound for its largest unit which has been struggling for growth against a backdrop of weaker demand.

The stock rose 0.2 percent to 1,596 pence at 9:30 am in London.

Highlights of the quarter included a record number of views of the company's Christmas ad and strong demand for new products, chief executive officer Christopher Bailey said in a statement. Bailey is due to hand over the reins to Marco Gobbetti in July and will return to steering Burberry's creative direction as part of a management re-shuffle that also includes a new finance chief, Julie Brown, who started on the job Wednesday.

Other third-quarter highlights included:

• Total sales of £735 million topped the £721 million estimate
• UK comparable sales rose about 40 percent as the pound's weakness after the Brexit referendum boosted tourist spending
• Mainland China had high single-digit percentage comparable sales growth, Hong Kong improved to low single-digit percentage decline
• Americas showed low single-digit percentage decline
• No change to guidance for retail, wholesale and licensing revenue
• Company expects full-year pretax profit to be in line with market expectations

By Thomas Buckley; editors: Matthew Boyle and Paul Jarvis.