Burbery Yields More Than Expected

Burbery Yields More Than ExpectedAfter sturdy sales of coats and leather goods helped it beat revenue forecasts, Luxury group Burberry plans to pace up expansion, with a focus on emerging markets, e-commerce and menswear.

Famous for camel, red and black check pattern, the 154-year-old British group remarked that, it would nearly double capital spending to 130 million pounds ($186 million) in its 2010-11 financial year, despite an uncertain economic outlook.

"We do believe that Burberry, distinct from what's happening in the marketplace, has got specific momentum in the brand right now", Chief Financial Officer, Stacey Cartwright told reporters, saying the group was reaping the benefit of past investment in IT systems and staff training, as well as cutting-edge design.

"We do believe we're outperforming".

With Italy's Prada posting a jump in first-quarter revenue on Monday Luxury goods firms are recovering from a long and deep recession.

But analysts fear tax rises and public spending cuts to rein in government debt, particularly in Europe, could hit consumer spending in the months ahead.

Cartwright said Burberry's velocity in reacting to the downturn, when it slashed costs, jobs stocks and ranges, as well as a reaction to the latest pick-up in trading, when it introduced an extra "April Showers" collection, showed it could cope with an uncertain trading environment.

Profit before tax and one-off items rose 23 percent to a record 215 million pounds in the year ended March 31, topping forecasts for 201-208 million in a Reuter's poll.

At 0908 GMT, Burberry shares were up 4.8 percent at 642 pence, compared with a 2.6 percent rise on the STOXX 600 European personal and household goods index .SXQP. They have outperformed that index by about 6 percent this year.