Burberry Group has reported growth in revenue in the first quarter of its financial year which beat analyst expectations. The compoany now anticipates a lower foreign exchange hit to full-year profit than previously thought.

As per the luxury fashion retailer retail revenue in the three months to June 30 rose 13 per cent year-on-year to £478.0 million, boosted by favourable foreign exchange rates when overseas sales were translated back into the weak pound. On an underlying basis sales grew by 3 per cent, while like-for-like sales increased by 4 per cent.

Burberry says its strength in mainland China drove improved, mid-single-digit percentage growth in Asia Pacific, while Hong Kong also continued to improve. 40 per cent of Burberry's sales come from Chinese customers, versus 30 per cent for the wider luxury goods sector, a slowdown in Asia is problematic for the fashion label.

As things pick up in Asia, growth has been maintained in Europe, the Middle East, India & Africa, where strength in the UK led to high single-digit percentage growth for the whole division in the first quarter. The Americas, delivered a low single-digit percentage decline, which Burberry says was due to reduced demand at home from both tourists and domestic customers. The strength of the US dollar, however, drove a strong increase in sales from US customers abroad.

While the weak pound boosts sales for Burberry, it harms profit due to much of the retailer's products being sourced in US dollars. Analyst say the company believes some of the challenges faced by the luxury sector over the last few years are fading. Indeed, Chinese consumers are returning while a pickup in the European economy is showing through to the luxury sector.