Jimmy Choo, the luxury footwear brand, stock surged Friday after it said revenue growth and same-store sales turned positive in the four months from July despite a tough trading environment.
Analysts say that Choo is a convincing growth story and it set to outpace its larger competitors who have been struggling to maintain growth.
The stock gained 4.72% to 134.83 pence Friday, having lost 6% since the start of the year. In a trading announcement earlier in the session, Choo said that it had increased revenue in all regions in the second half and saw continued strength in China.
The trading update did not give exact numbers but said growth was driven by store openings and improved retail trading.
"Through our focus on improving operating efficiency and cost management we expect to deliver margin improvement and strong underlying cash generation for the full year as a whole, with steps towards further deleveraging," the company said.
It also said that the weaker pound was benefiting the company.
"We look forward to achieving another record year despite the challenging backdrop, and remain on track to deliver underlying profits in line with expectations," CEO Pierre Denis said in a statement. Denis is a former LVMH LVMUY executive.
Liberum analysts said that the fashion stock is blowing its larger rivals out of the water in a note to clients.
"We believe that it is one of the most convincing growth stories in the luxury sector," analysts Tom Gadsby and Adam Tomlinson said. "The company is growing at almost double the rate of the peer group and yet is rated in line with the sector. Given the recovery in sector valuations in the past 12 months we upgrade our peer group relative valuation of Choo from 135 pence to 155 pence."
