Burberry sales edge up after improvements in China

Turnover would have risen 3pc by stripping out sales falls in Hong Kong and Macau, regions that have caused trouble for many retailers due to changes to Chinese visas, which has stemmed the flow of visitors from the mainland.

Asia-Pacific sales were down “mid-single digit” overall for the quarter but Burberry reported that mainland China, where the slowdown in luxury has been a point of pain for many brands, had returned to growth.

Other luxury groups that expanded rapidly in mainland China such as Gucci and LVMH have also suffered from the economic uncertainty there, and violent stock market gyrations this year have not helped.

The luxury goods giant has been battling weakening Asian demand and currency headwinds and Christopher Bailey, chief executive, conceded it had been a tougher quarter than expected.

But he cautioned the outlook for the luxury sector remained ” uncertain”, adding that the third quarter retail sales performance was still below internal forecasts.

In October, Burberry warned that full-year profits will be lower than last year.

“This can only be seen as a short term measure as a longer term freeze on recruitment and incentive payments will chip away at the stability of the business”, Liberum analyst Tom Gadsby said.

Europe presented a brighter picture where sales rose, with Italy, Germany and Spain particularly strong.

The trendy trench coat maker halted sharp falls in like-for-like retail sales, which remained unchanged in its Christmas quarter to December 31 against a 4% drop in the previous three months. The Americas also improved to record marginally positive growth.