Burberry Group PLC (LSE:BRBY) shares sashayed higher after the British fashion house reported a further improvement in comparable sales growth in the past quarter, supported by a good performance in Asia and demand for trenchcoats and scarves.
Comparable store sales were up 3% in the 13 weeks to 27 December, the third quarter of the FTSE 100 group's financial year, improving from the 2% growth in the second quarter and a 1% decline in the first.
Retail revenue for the third quarter rose 1% to £665 million, or 3% at constant currency rates, with the fashion house saying it delivered "a higher quality of revenue" with a shorter, more discreet markdown period compared to the prior year.
Growth in Greater China accelerated to 6%, while Asia Pacific was up 5%, supported by a 13% increase in South Korea.
Burberry highlighted growing engagement with Gen Z consumers in Greater China and Asia Pacific and noted stronger retail productivity, helped by festive activations and visual merchandising enhancements, including the rollout of "scarf bars".
Sales in the Americas increased 2%, while EMEIA was flat due to continued weakness in tourist spending.
Chief executive officer Joshua Schulman said: “During the festive quarter, we continued to build momentum with our Burberry Forward strategy, delivering sequential improvement in comparable sales growth and an improved quality of revenue across channels and geographies.”
He added: “Our customers responded to our immersive Timeless British Luxury campaigns and experiences, while the continued strength in our core outerwear category is now extending into accessories and ready-to-wear.”
The company expects adjusted operating profit for FY26 to be in line with market consensus.
The shares were up 4.9% to 1,280p in morning trading on Wednesday, up 31% since the start of last year.
Analysts at UBS said retail sales were in line with consensus forecasts, with the City expecting LFL sales of nearer 2%.
APAC sales of 5% were much stronger than the 1% predicted, with Greater China slightly better than forecast, while EMEIA and Americas were both a little softer than expected.
"Importantly, following the recent sector weakness, the positive surprise should be the very strong performance in Greater China with growth doubling from +3% prior quarter to +6%," analysts said, noting a tougher comparative from last year.
** UPDATE: Adds share price, analyst comment **