Burberry update shows positive signs, says Hargreaves Lansdown

10th Jul 2014 11:13

Luxury brand Burberry's first-quarter update showed signs of "blowing away some cobwebs", according to Hargreaves Lansdown Stockbrokers.Retail revenues totalled £370m in the three months to June 30th, up 17% on an underlying basis which excludes FX movements, an acceleration from the 13% registered in the second half of the previous financial year.However, growth on a reported basis slowed to 9% in the first quarter, from 11% in the second half, as currency headwinds increased.Nevertheless, Richard Hunter, Head of Equities at Hargreaves, said: "There are a number of strong figures coming from the statement, from the overall hike in revenues through to robust growth in the Asia Pacific - China in particular - and a creditable digital performance in the Americas."However, Hunter said that despite the progress the stock has been weak, having fallen 1.5% over the last year prior to Thursday's update, compared with a 3% gain on the FTSE 100."Burberry provides premium products, has a premium valuation, but has yet to attain a premium rating - however, updates such as this will continue to exert positive pressure on the market consensus which, for the moment, remains anchored at a strong 'hold'."BC