Enlarge imageBy Rachel Sanderson
LONDON (Reuters) - Luxury goods company Burberry
Investors are watching for signs the credit crunch is hitting luxury goods companies and bringing an end to the global boom in high-end spending.
Chief Financial Officer Stacey Cartwright said Burberry, famed for its trademark beige and red plaid, had continued "to experience high volume growth driven by the strength of our product designs" in the third quarter.
When asked whether Burberry was seeing a slowdown in the United States, Cartwright declined to comment on specifics but said the company’s decision to reiterate its guidance should be taken as an indication of its mood.
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This contrasts with U.S. high-end handbag and accessory
maker Coach Inc.
Burberry shares traded up 1.6 percent at 595 pence in early dealing, in line with strong gains at European luxury goods companies <.SXQP>.
Burberry reiterated the United States remained a key market for the brand with sales growing 29 percent on an underlying basis in the first half, with more than 20 percent growth in retail and 40 percent in wholesale.
Group adjusted operating profit, taking into account the costs of an IT infrastructure roll out, broadly met analyst expectations with a 13 percent increase to 95.1 million pounds for the six months ended September 30.
EXPANSION
Pre-tax profit came in at 95.8 million pounds. The rise was helped by strong expansion of Burberry’s retail network and a 15.1 million pound gain from the sale of its Haymarket headquarters.
"This performance is consistent with our full year expectations. This diversity and balance that Burberry has across its products, channels and regions give us many opportunities for future growth," Chief Executive Angela Ahrendts said in a statement.
After opening 11 new stores in the first six months across Europe, the United States and Asia, Burberry said it expected to open eight more in the second half of the financial year and increase its average retail selling space by 12 percent year-on-year.
It lowered its capital expenditure target to 50 million-55 million pounds for this financial year from 60 million pounds previously, having decided to reschedule some store refurbishments until next year.
The Atlas programme, Burberry’s IT infrastructure project, remained on track to deliver 20 million pounds of benefits this year, Burberry said.
It raised its interim dividend by 17 percent to 3.35 pence.
Three analysts surveyed by Reuters had seen adjusted operating profit rising to 95 million pounds to 96 million pounds.
Burberry’s total reported revenue, posted on October 16, rose 15 percent to 449 million pounds.
It will next update the market on January 15.
