14th January 2015
Fashion house Burberry has been branded a ‘buy’ by The Share Centre, as sales at the group rose by 15% to £604m in the third quarter.
The business, which features Victoria and David Beckham’s son Romeo in its advertising, expects wholesale revenues to fall in the second half of its financial year because of a slowdown in purchasing in Europe and Asia.
It said that sales in North America, China and Korea boosted results despite disappointment in Hong Kong.
Helal Miah, investment research analyst at The Share Centre, said: “Despite the fears of slower growth in certain regions of the world, Burberry pleased the market with Q3 retail revenue of £604m, up 15% and in keeping with the trend of the previous two quarters.
“North American sales saw double digit growth, while the disappointing sales figures for the Asia Pacific region could be explained by the protests and disruptions in Hong Kong. Chinese and Korean sales were “robust”, which should reassure investors worried about a slowing China.”
Part of the success of Burberry, which is famous for its check designs, has been its focus on making the most of online sales and social media. This has continued into the latest quarter helping sales and brand awareness – even in the beleaguered euro nations added Miah.
He said: “The first half results were held back by a relatively strong sterling, however as the currency has weakened in recent months, Q3 translated earnings have been helped. If sterling holds at these levels then the final results should receive an overall boost.
“We recommend Burberry as a ‘buy’ for investors seeking capital growth as we believe the luxury retailer can continue to build on its iconic brand in a strained global economy. This is helped by its strong management and the fact it is geographically well positioned and diversified.”