Burberry falls after beating estimates

Burberry reported first-half earnings that beat analysts estimates and raised its dividend by 40% but its shares took a hit in early trading on Tuesday.

Adjusted pretax profit at the luxury goods maker advanced 26% to £161.6m ($257m), Burberry said in a statement, while net income climbed to £117.2m pounds from £83.1m a year earlier.

The pre-tax figure was higher than the £159m average of five analyst estimates compiled by Bloomberg. The dividend for the six months to the end of September was increased to 7p a share.

Burberry confirmed that it will open as many as 10 stores in the second half in locations from China to Paris, dispelling concern over slowing demand. Rivals Hermes International, LVMH Moet Hennessy Louis Vuitton and PPR all posted quarterly sales that beat expectations in the past month, led by growth in Asia.

However, the shares fell 4.6% to 1355p at 0934GMT, making them the biggest blue-chip laggard of the morning session as the company warned about the global economic outlook and investors took profits on a stock that has gained 23% so far this year. There was also some disappointment that the company failed to raise it profit targets.

Angela Ahrendts, chief executive of Burberry, said in the statement: “We remain mindful of, and prepared to react to, any local or global uncertainties as we drive for long-term sustainable growth.”

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