There has been a warning from British luxury brand Burberry that the strong pound will reduce this year’s profits even as it revealed faster than expected sales growth – up 12 percent – in the quarter to the end of June.
Retail revenue was 370 million pounds (465 million euros).
Burberry has managed to keep sales rising in China, unlike some other luxury goods firms which have suffered following a crackdown on corruption and conspicuous spending.
But sterling’s strength is taking its toll on earnings power as the company’s fixed costs are in pounds and revenue comes in a variety of currencies.
It said exchange rates would reduce this year’s retail and wholesale profit by about 55 million pounds (69 million euros) and would narrow its adjusted operating margin to around 16 percent from 17.5 percent.