Burberry Meets Sales Estimates on Tourism Boost From Brexit

LONDON, United Kingdom — Burberry Group Plc, the British trench coat maker, reported sales in line with analysts' estimates as a boost in tourist spending on luxury goods in the UK after the Brexit referendum offset declines in its Asian business.

Revenue rose 5 percent to £1.16 billion ($1.42 billion) in the six months through September, London-based Burberry said in a statement Tuesday. Analysts predicted £1.17 billion, based on the median estimate compiled by Bloomberg. Second-quarter retail sales climbed 2 percent on a comparable basis, meeting analysts’ expectations.

“Improved performance from the traveling luxury customer in the second quarter was most significant in the UK,” Burberry said in the statement, adding that comparable sales rose 30 percent in that region.

Spending on luxury items in the UK is rising as sterling's fall has made its scarves and gloves cheaper for shoppers visiting from other countries. Last week, rival LVMH reported sales that beat estimates on rising demand for leather goods and fragrances, outpacing peers who've been hurt by lower tourism flows and falling demand from Asia. Burberry has appointed Marco Gobbetti as chief executive officer after Christopher Bailey's two-year tenure led to a fall in profits.

Burberry also said the weakness of sterling will add £105 million to full-year profit, based on late September exchange rates, and sterling’s declines since then could add about £20 million to that figure. In July, the company forecast a £90 million boost. The company maintained its full-year adjusted pretax profit outlook.

By Thomas Buckley; editors: Matthew Boyle and Thomas Mulier.