British luxury fashion brand Mulberry said it expects overseas sales to overtake those in its home market in two years, as it beat forecasts with a more than fourfold increase in profit.
Shares in the firm, best known for its leather handbags priced around £500 to £900 ($809 to $1,455 U.S.), rose more than 6 per cent on Thursday after the company outlined its potential for expansion, particularly in China and the United States.
"Probably in the year after next, the sales to the rest of the world will exceed the U.K. and that trend will continue," Chairman and Chief Executive Godfrey Davis said.
"We have two shops in New York so there's quite a lot of the United States to go at, we've got one shop in Beijing so there's quite a lot of China to go at," he said.
Mulberry, which designs, manufactures and sells leather goods and accessories, trades from 44 owned stores and department store concessions in the U.K. and 42 owned or franchised stores overseas.
Davis expects at least 12 overseas openings in the 2011-12 year, with new stores in the U.S., South Korea, China, Germany, Switzerland and Austria.
"We believe that this could be just the beginning of the Mulberry story given the limited footprint held in many of the largest luxury goods markets outside the U.K.," said John Cummins, analyst at house broker Altium Securities, who raised his earnings forecasts by 12.8 per cent and 12.1 per cent for the 2011-12 and 2012-13 years respectively.
Shares in Mulberry have risen nearly sixfold over the last year, valuing the business at about £868-million.
The firm has a greater market capitalization than the combined total of struggling British high-street retailers Dixons, HMV and Game .
The global luxury goods market has continued last year's strong recovery, defying fears it might be hit by austerity measures in Europe and steps to cool fast-growing emerging market economies. Last month Burberry posted a 39 per cent rise in profit.
Mulberry made a pretax profit of £23.3-million in the year to March 31, ahead of analysts' average forecast of £21.5-million, according to Thomson Reuters I/B/E/S data, and it made £5.1-million in 2009-10.
2010-11 revenue jumped 69 per cent to £121.6-million, with international sales up 145 per cent to £40.5-million.
Both retail and wholesale sales were up 38 per cent in the 10 weeks to June 4.
Mulberry, which ended the year with cash of £21.4-million, is paying a dividend of 4 pence, up 82 per cent.
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