London—In what was viewed as a dramatic turnaround in the luxury market, Burberry Group PLC today reported a pretax profit ahead of what analysts expected and reported stronger than expected growth in Asia.
That was a relief in many circles since the British luxurygoods house reported last September that slowing sales in China could hurt its profitability. In recent months other luxurygoods giants, such as LVMH and Kering have reported slower sales in Asian, too.
But Burberry said its adjusted pretax profit increased 14% to 427.8 million pounds (about $652.9 million) in the year ended March 31. That was better than the 417.5 million pounds analysts had expected.
Now that retail sales through its own store network account for about 72% of its sales, Burberry said profit for the first half of its new fiscal year would be below last year’s as focus shifts from wholesale markets sales to high-growth Latin American and Asian retail sales from Burberry’s own stores.
China and Hong Kong both posted double-digit percentage growth in comparable store sales for the year, compared with a low single-digit increase in the Americas, the company said. Europe was broadly unchanged after a strong first quarter. Total revenue advanced 8% to 2 billion pounds.
“Looking ahead, although the macro environment remains uncertain, Burberry is well positioned with opportunity by channel, region and product,” said Angela Ahrendts, chief executive.
Burberry continues to invest in social and online marketing and sales, (including webcasting its fashion shows) and adding interactive technology into its stores.
The company also raised its full year dividend 16% to 29 pence a share.