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Burberry Third Quarter Sales Up 26.3 Percent

Outerwear, leather goods helped drive retail sales.

LONDON — Burberry Group plc on Tuesday reported a 26.3 percent increase in third-quarter sales to 480 million pounds, or $758.4 million, from 380 million pounds, or $600.4 million, in the same period last year, thanks to strong global demand, particularly for outerwear and leather goods.

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Excluding Burberry’s business in Spain, which is being restructured to phase in the label’s global collection and discontinue the local collection, revenues in the three months ended Dec. 31 rose 30 percent to 470 million pounds, or $742.6 million.

All dollar figures have been calculated at average exchange rates for the three-month period.

Angela Ahrendts, chief executive officer of Burberry, said the sales rise represented “strong, consistent growth in both retail and wholesale and in every product division and region.” As a result, she added, “We now expect adjusted profit before tax for the current financial year to be at the top end of market expectations.”

Analysts expect a profit before tax figure of between 250 million pounds and 290 million pounds, or between $397 million and $460 million, for the fiscal year ending March 31.

One of the brand’s new initiatives is the redesign of Burberry’s Web site. Stacey Cartwright, executive vice president and chief financial officer, declined to give a specific figure for what the company had spent on its site, but said it is part of the brand’s planned capital expenditure of 130 million pounds, or $206.8 million, in the year to March 31. Cartwright said that, on an anecdotal level, the company has seen “a new young customer coming into stores” as a result of its investment in digital marketing.

Looking to 2011, Cartwright said the company plans to invest in the store portfolio after focusing on its infrastructure and digital projects. She also noted the company faces challenges common to the sector, such as raw material price increases and “tough comps following such a strong 2010-11.”

Retail sales during the three-month period grew 40 percent at actual exchange rates to 335 million pounds, or $529.3 million, with growth in Burberry’s mainline retail driven by outerwear and large leather goods, the company said. The strong performance in these categories meant there was an increase in the average price per unit sold. Same-store sales grew 14 percent in the three months, the company added.

In terms of regions, Asia-Pacific had the strongest growth, with sales up 68 percent at actual exchange rates to 150 million pounds, or $237 million. In China, where Burberry acquired its stores from a franchisee in September and it transfered from a wholesale to retail business, same-store sales rose 30 percent in the acquired stores. Cartwright noted that men’s wear is driving growth for the label in China. She added the Prorsum runway collection and outerwear had also performed well.

Meanwhile sales in Europe, excluding Spain, rose 13 percent at actual exchange rates, while sales in the Americas rose 24 percent.

Wholesale sales in the quarter grew 15 percent at actual exchange rates to 112 million pounds, or $177 million. The company said the rise in wholesale sales was driven by earlier shipment of deliveries, spurred on by a monthly flow of product and “strong demand from end consumers.”