Burberry, the UK's largest luxury-goods maker, reported a 10 per cent increase in first-quarter sales as increased demand in Europe compensated for weakness in Hong Kong.

Retail revenue rose to £407 million (€578 million) in the three months through June, London-based Burberry said Wednesday in a statement.

Analysts predicted £414 million, according to the median of 17 estimates compiled by Bloomberg.

Comparable sales climbed 6 per cent, beating the 5.5 per cent estimate.

Burberry is battling against the influences of a strong pound and lower demand in Hong Kong, which is seeing fewer visits from wealthy Chinese shoppers.

To account for currency fluctuations and stoke demand in the island city as well as within China, the company in April cut trenchcoat and scarf prices in both destinations, while raising them in Europe.

The luxury-goods maker said currencies would boost profit by £20 million this year if they stay at current rates, which compares with a forecast in May of £10 million. Still, the company said the benefit will be offset by a “more adverse geographic mix.”

Bloomberg