London–Burberry denied reports today that the it would be seeking a listing Hong Kong stock exchange as the British luxurygoods company posted a better-than-expected fiscal first-quarter sales.
Despite the fact the company instituted a plan to open 20 to 25 new stores this year as well as refurbishing its London flagship and others, Burberry executives said the company didn’t need extra funding.
“There is no need to raise capital, there is no catalyst for us to be considering that (a Hong Kong listing),” Finance Director Stacey Cartwright, Burberry’s finance director said in a conference call today. “We never said we would consider a Hong Kong listing.”
Ever since Prada successfully launched its IPO in Hong Kong, a move that would raise its profile in the burgeoning Greater China market, speculation has circulated in financial circles that other luxurygoods companies might follow suit. Rumors that Burberry might seek a listing continue, and others believe the company could be a prime takeover target.
That speculation arose again as Burberry reported today that for the quarter ended June 30, sales rose 30% to 367 million pounds (about $585 million), ahead of analysts’ average estimate expecting 344 million pounds.
Burberry said in May that it expects more modest growth in profit margins this year as it accelerates store openings and increases spending on technology.
‘U.S. Has Performed Very Strongly’
The company plans “modest improvement” in full-year retail and wholesale operating margin and targets a “high-teen” percentage increase for wholesale revenue in the first half, excluding China, Burberry said.
Retail sales rose 44% to 245 million pounds, while wholesale revenue increased 9% to 95 million pounds. Sales jumped 62% in the Asia-Pacific region, 23% in Europe and 16% in the Americas.
Cartwright said that the brand will “largely be able to mitigate” raw-material price increases.
“The U.S. has performed very strongly within that wholesale guidance number. We believe we continue to outperform versus many of our luxury peers there,” Cartwright said.
Burberry also said it expects wholesale revenue excluding China to increase by a high-teens percentage at constant exchange rates in the first half, up from its previous forecast of mid-teens growth.
Burberry added it expected a percentage gain for licensing revenue in the current year to March in the mid-single digits.