The weaker sterling helped Burberry exceed second quarter expectations as it recorded 30 per cent rise in sales in the UK alone.
The fashion brand and retailer said positive trading in Europe and a “significant out performance in the UK” – boosted by tourists flocking to London to take advantage of the weaker pound – led to a two per cent uptick in comparable retail sales, the company’s first growth in the measure for four quarters.
Analysts had been expecting a one per cent rise in Burberry’s second quarter retail sales.
They also estimate that while 40 per cent of Burberry’s costs derive from Britain, only about 10 per cent of its sales comes from its home market – with more than half of those coming from tourists.
If the pound continues to be devalued or is sustained as it is, this could boost Burberry’s adjusted profit for the year by around £90 million.
However, looking at the half-year period to September 30, total sales went down four per cent on an underlying basis to £1.16 billion thanks to a fall in wholesale and licensing revenues.
Christopher Bailey, chief creative and chief executive officer, said: “In a challenging external environment, we continue to focus on product innovation, retail productivity and digital leadership, against a backdrop of sustained action and investment to deliver long-term outperformance of our brand and business.
“The progress we are making to improve our ways of working, the agility of our teams to react to changes in consumer behaviour and the strength of our brand give us confidence for the future.
“We remain on track to deliver our financial goals.”