Burberry profit ahead of forecasts
LONDON (Reuters) - British luxury goods group Burberry (BRBY.L) beat forecasts with a 6 percent rise in first-half profit as its most wealthy shoppers continued to spend despite a faltering global economy.
The group, best known for its camel, red and black check pattern, said on Wednesday it made a profit before tax and one off items of 173 million pounds ($276 million) in the six months to September 30.
That compared to analyst forecasts of 157-172 million pounds, with a consensus of 167 million pounds, according to a company poll, and 162 million pounds in the same period last year.
Last month Burberry said sales had steadied in the final weeks of its second quarter, reassuring investors rattled by a shock profit warning in September.
At the time the firm said the "aspirational luxury consumer" had been hit by the slowing global economy, but wealthier shoppers continued to spend. It also said it had sold a higher proportion of goods from its top-end lines, boosting profit margins.
Total first-half revenue was 883 million pounds, up 8 percent at constant exchange rates, with first quarter growth of 11 percent slowing to 5 percent in the second.
The firm said its retail/wholesale adjusted operating margin was up by 60 basis points to 15.5 percent.
Burberry said guidance for the second half was unchanged from that issued in October.
However, the firm said the decision to end its license agreement with Interparfums (IPAR.PA) and directly operate fragrance and beauty as a fifth product division from April 1 would be broadly neutral to underlying profit in 2013/14 and earnings accretive thereafter.
It said there was a "significant opportunity" in under-penetrated opening price point categories in fragrance and beauty.
Burberry will make a 181 million euros payment in the second half for ending the license, 71 million pounds of which is taken as an exceptional item in the first half accounts.
The group, which ended the half with net cash of 237 million pounds, is paying an interim dividend of 8 pence, up 14 percent.
Shares in the firm, down 16 percent over the last six months, closed Tuesday at 1,240 pence, valuing the business at 5.48 billion pounds. ($1 = 0.6257 British pounds)
(Reporting by James Davey; Editing by Stephen Mangan and Louise Heavens)
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