Burberry Group Plc sales rose at the fastest rate in two years after the trench-coat maker benefited from a rebound of demand in China.
Sales rose 18% at comparable stores on a constant exchange rate basis in the 13 weeks ended July 1, the British company said Friday. That was in line with analysts’ estimates. A recovery in China with sales up 46% compensated somewhat for weakness in the US market.
Burberry Chief Executive Officer Jonathan Akeroyd has been trying to boost the appeal of the brand. He’s hoping Daniel Lee, the new designer who unveiled his debut collection in February, can reinvigorate the popularity of the label by going back to its British roots.
Investors sold off the stock in May after Burberry warned of demand slowing down in the US, and that trend continued in the first quarter with sales falling 8% in the Americas region.
The company reiterated its guidance for low double-digit sales growth this year.
Heritage rainwear sold particularly well in the first quarter, as did leather goods including women’s bags, Burberry said. Burberry refurbished 19 stores during the period and is on track to upgrade more than 50% of stores by the end of the year.
In May, Akeroyd said Lee’s creations will be available in stores from September, and that the reception from wholesalers had been positive.
Akeroyd took over the running of the trench-coat maker more than a year ago. Like his predecessors, he’s seeking to elevate the prestigiousness of Burberry while also boosting revenue by selling more accessories and bags in the long term.
Read More: Burberry Tries to Make Britain Cool Again With Tartan And Whisky
Analysts are increasingly speaking of polarization among luxury groups, distinguishing between a few outperformers such as LVMH Moet Hennessy Louis Vuitton SE and Hermes International and the rest, which will probably lag behind.
Read More: BofA Sees Growing Gap Between Luxury Sector Winners and Losers
(Updates with details from statement, context from sixth paragraph.)
