Burberry reported an 11% growth in sales in the second quarter as compared to the same period last year. But in absolute value terms the turnover has dropped when compared to the previous quarter. The markets have not taken the news well and the shares fell. But the fashion power house is confident that the full year pretax profits will be more in tune with the market expectations.
Amongst the top fashion brands, Burberry has been one of the top performers in the last two years. Their shares have also rallied 69% during the period but the quarterly results pressed it down by 4%. Their growth has been driven by the growing demands from the Asian markets particularly for coats and leather goods. Still the growth was slower than the 27% growth recorded in the first quarter.
Angela Ahrendts, the CEO of the company is however very optimistic about the future and confident that the full year profits will be as expected because of their push ahead in China. They have completed the acquisition of their retail operations in China and have further plans of expansion there. It gives them the confidence that they can sustain the growth they have achieved now.