Burberry toasts lift in sales

Burberry's catwalk show became one of the hottest tickets at London Fashion Week last month, and it seems its customers have been equally eager to get hold of its handbags, "snoods" and trench coats.

The luxury goods group was heralded on its return to Fashion Week following an extravagant show watched by the Harry Potter star Emma Watson, who also fronts Burberry's recent advertising campaign, and an equally extravagant after party.

The champagne was flowing again yesterday as the 153-year-old group announced second-quarter sales had lifted five per cent year-on-year to £343m, beating analysts' forecasts. The City also toasted the announcement as shares rose five per cent to 565.5p.

Angela Ahrendts, the group's chief executive, said: "We achieved further strategic progress, highlighted by good non-apparel growth, the strengthening of our position in Japan and continued brand investment, as demonstrated by Burberry's return to London Fashion Week."

The group, which broke into the FTSE 100 index of blue-chip stocks last month, saw a 23 per cent dip in wholesale revenues in the first half of its financial year. Yet analysts said retail sales were a better indicator of performance. These rose 14 per cent in the first half on an underlying basis, with especially strong growth in Europe and Asia, and with Burberry handbags and snoods – half scarf, half hood – among the biggest selling products. The UK and Korea remain the best performing markets, where spending was helped by favourable currency movements.

The group also benefited from its cost-cutting programme announced in January, already hitting the full-year savings target of £50m.

Dennis Weber, an analyst at Evolution Securities, said the group was "the only self-help story in the sector with good visibility".