Burberry struts back from profit warning with overseas expansion Burberry, the luxury fashion group, has bounced back from a shock September profit warning with forecast-beating results. A 6 per cent rise in underlying profits to £173m for the half year to October - better than City expectations - were in contrast with September when its shares dropped nearly 20 per cent after it spooked the markets with a warning over a sales slowdown. Fears of flagging Chinese sales have not held back Burberry's plans for the region. The finance director, Stacey Cartwright, said Burberry was "still positive on China" and would open three flagship stores in Shanghai over the coming year. A favourite with the British fashion scene, Burberry has continued its global store roll-out, recently opening stores in Hong Kong and Chicago as well as London's Regent Street. The chief executive, Angela Ahrendts, said Burberry would "stay in lane" and not change its plans to invest in new stores, as "steady wins the race." Despite what Ms Ahrendts called a "challenging" environment, Burberry's retail and wholesale business - together accounting for 90 per cent of sales - delivered 7 per cent sales growth and an 11 per cent rise in profit. The group is paying an interim dividend of 8p, up 14 per cent. Pre-tax profit dropped from £159m to £112m as the company booked a £73.8m charge over the termination of the fragrance licence with the French company Interparfums asit took its perfumes in house. Ms Cartwright said the deal should be earnings-positive after 2014. The fragrance deal has led to the creation of a new division, Burberry Beauty. Bethany Hocking, at Investec, said: "We remain long-term fans but the backdrop is tough. Christmas is crucial, and we see few near-term catalysts. Burberry shares fell 4 per cent to 1,199p.