Burberry posts rise in first half profit but warns of challenging environment

Luxury retailer Burberry posted a rise in first half pre-tax profit but warned that the market environment remains challenging.

For the six months to the end of September, adjusted pre-tax profit rose to £153m from the same period last year, while revenue was unchanged at £1.1bn. Reported pre-tax profit was up 9% to £155m.

UBS was expecting profit to fall 7% to £142m.

Burberry posted adjusted earnings per share of 26p, up from 25.4p in the first half of 2013 and lifted its dividend by 5% to 10.2p.

In addition, the company said that since the start of the third quarter, comparable sales, although volatile, have improved overall relative to the second quarter.

Ahead of the key festive period, Burberry said it continues to assume mid single-digit percentage growth in comparable sales in the second half, but the external environment remains challenging and uncertain.

Chief executive officer Christopher Bailey said: “This robust performance reflects decisive action as the external environment became more challenging in key markets over the period. We enter the second half mindful of this backdrop, but confident in our strongest-ever festive plans and emphasis on productivity and efficiency.

Richard Hunter, head of equities at Hargreaves Lansdown, said: “Given a disappointing trading update last month, expectations were low for these numbers but Burberry seems to have pulled the rabbit out of the hat.

“Revenue has held up and adjusted profit has shown a modest improvement, which is an achievement given the headwinds being faced in the Asian region, and China in particular.”

At 1033 GMT, Burberry shares were up 0.5% at 1,342p.