Burberry Sales Rise as China Growth Recovers
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By PETER EVANS
LONDON—Burberry Group BRBY.LN +4.27% PLC on Wednesday showed signs of a return to stability as a strong performance by its men's and outerwear collections gave revenue a lift in the second half, especially in China.
Second-half revenue was £1.12 billion ($1.71 billion), a 9% climb and a 7% rise in sales from stores open more than a year. It expects a low to mid single-digit percentage increase in retail revenue, which now accounts for 75% of total revenue, during the current fiscal year.
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Burberry has been recovering from an apparent slowdown in sales in the previously booming Chinese market, which led to a shock profit warning in September. The move sent its shares plunging 21% in one day and caused reverberations around the luxury industry as investors called an end to the China-led luxury boom.
However, a recent spate of store openings in the country contributed to a recovery in sales growth in the Asia Pacific region, where combined retail and wholesale revenue increased 16% to £447 million in the six months to March 31, though Chief Executive Angela Ahrendts said global markets remain under pressure.
"We expect the external global environment to remain challenging," Ms. Ahrendts said, though there were "significant opportunities" for Burberry to expand in the next year.
Growth in Asia Pacific, Burberry's biggest and fastest-growing region, far outpaced other regions. Sales in the Americas rose 7% to £261 million while European sales were largely unchanged at £288 million.
The company plans to open 25 new stores in the year to March 2014 and close about 15, with a greater focus on China and Latin America.
It will release full-year results on May 21.
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