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Burberry tops estimates as new boss takes helm

Burberry reported a hike in sales and pre-tax profit for the year ending March on Tuesday, in the first set of results since new CEO Christopher Bailey took the helm.

Ian Gavan, Getty Images

The luxury U.K. fashion house reported a 17 percent increase in sales to £2.330 billion ($3.92 billion) for the period, narrowly beating analyst estimates of £2.329 billion, according to a Thompson Reuters poll.

Adjusted pre-tax profit at the company rose 8 percent for the tax year 2013-14, coming in at £461 million, topping expectations of £455 million.

The results should serve to reassure investors concerned about the resignation of high-profile boss Angela Ahrendts. She quit Burberry this month to join Apple, with Chief Creative Officer Bailey taking on the CEO role as well.

Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said the results indicated that Bailey had inherited a company "which is in fine fettle."

In a news release accompanying the results, Bailey said: "While mindful of macroeconomic uncertainties and currency headwinds, we remain focused on the things we can control and confident of driving sustainable future growth, benefiting all our stakeholders."

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With Chinese consumers a key audience for the brand, Burberry has struggled with the strength of the sterling versus the yuan and other currencies. Sterling has risen 1.65 percent against the U.S. dollar since the start of the year.

But on Wednesday, the company said it planned to "further evolve" its store portfolio in China and the Middle East in particular.

Burberry also said it eyed growth opportunities in Japan and in the beauty segment.

"Our teams are united and energized by the opportunities ahead - from unlocking Japan, to accelerating Beauty and further integrating the physical and digital to deliver distinctive experiences," Bailey added.

"While mindful of macroeconomic uncertainties and currency headwinds, we remain focused on the things we can control and confident of driving sustainable future growth, benefiting all our stakeholders."

Hargreaves Lansdown's Hunter said Burberry's focus on beauty and the East should unlock further value.

But he added: "Less positively, Burberry highlighted that currency headwinds could have a material impact on profits next year, the dividend yield remains anemic despite the hike announced and the retail sector remains under extreme pressure, as evidenced by some recent updates from competitors."

Founded in 1856, Burberry bills itself as quintessentially British and is known for its trademark check and trench coat. Its flagship markets include Chicago, Hong Kong, Milan and London.

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