Burberry has upgraded its full-year profit forecast after a rebound in sales since December, driven by a strong recovery in demand for its luxury goods in China and South Korea.
In a rare piece of positive news from a fashion retail sector battered by the coronavirus crisis, Burberry said on Friday that like-for-like store retail sales would be up by nearly a third year on year in the first three months of 2021.
The unscheduled trading update cheered investors, with Burberry’s share price up about 7% at lunchtime on Friday, its highest level since before the pandemic.
“Since December, we have continued to see a strong rebound and now expect revenue and adjusted operating profit to be ahead of consensus expectations,” the company said.
Burberry, known for its trench coats and distinctive patterned goods, said the performance upgrade is expected to lessen the overall decline in full-year revenues to 10%-11%. Analysts had forecast a fall of about 13%, according to Burberry.
The company, which has used stars such as the footballer Marcus Rashford to broaden the appeal of its collections to a younger market, said in January it had also seen strong demand from Chinese and Korean shoppers in the closing months of 2020.
While sales in Europe, the Middle East and Africa were down about 37%, said Burberry, on the back of store closures and fewer tourists, sales across the Asia Pacific market were up 11%. It again singled out China and South Korea as driving the recovery in sales.
Burberry is operating with about 15% of its stores around the world closed and about a third under reduced trading hours or restrictions.
Earlier this week, the Italian fashion house Prada and the luxury goods group Salvatore Ferragamo also said that strength in China had boosted sales this year.