Luxury retailers Tiffany and Burberry posted strong results yesterday despite ongoing challenges among mainstream players in the sector, which saw American Eagle Outfitters announce a store closure plan.

Tiffany, the world’s second largest luxury jewellery retailer, posted first-quarter profit that exceeded analysts’ estimates and raised its forecast for the year as price increases helped boost sales.

Net income rose 50 per cent to $125.6 million, or 97 US cents a share, in the three months to April 30th, from $83.6 million, or 65 cents, a year earlier, the company said in a statement yesterday, well ahead of analysts’ projections.

Revenue climbed 13 per cent to $1.01 billion, also ahead of estimates. The sales improvement, which took place in all regions, "suggests strong underlying trends continue to improve", David Schick, an analyst with Stifel Financial, said.

Tiffany ranks second to Cie. Financière Richemont in global sales of luxury jewellery.

British group Burberry reported full-year profit that also topped analysts’ estimates on Christopher Bailey’s first results day since taking over as chief executive officer. Adjusted pretax profit rose 8 per cent to £461 million in the 12 months to March 31st.

In a conference call, Mr Bailey, Burberry's creative leader who this month replaced Angela Ahrendts as chief executive, said the group hoped to quadruple its revenue in Japan by 2017. The British maker of luxury clothing and accessories has been taking back control of important parts of the business from licensed vendors and the Japan licence expiry in June next year would be the final step in that strategy and a major test for the Burberry boss.

Away from the elite end of the sector, American Eagle Outfitters announced plans to close an additional 150 stores after posting sluggish sales yesterday, joining a cluster of North American retailers with lower than predicted results. – (Reuters/Bloomberg)