British luxury fashion label Burberry reported a better-than-expected 2 percent rise in retail sales in its second-quarter after tourists in London took advantage of the weaker pound to buy its luxury goods.
The company said positive trading in Europe and a "significant outperformance in the U.K." helped the improvement in comparable retail sales, its first growth in the measure for four quarters.
Burberry has been one of the best performing stocks since Britain voted to leave the European Union on June 23, helped by the weaker pound. Its shares are up 35 percent, outperforming the FTSE 100 index by 24 percent.
Analysts were expecting a 1 percent rise in second-quarter retail.
However, shares slumped 9 percent by mid-morning trade on Tuesday with traders citing a decline in first-half underlying revenue. George Salmon, equity analyst at Hargreaves Lansdown, believes that a weaker pound may spell bad news for U.K. shoppers.
"Unfortunately, the U.K. makes up a relatively small percentage of Burberry's sales. So while the group has managed to deliver improving like-for-like growth in its stores this quarter, this was achieved against a pretty unchallenging comparative period. Conditions remain difficult." he said in a note on Tuesday morning.