Markets benefit from Burberry & LVMH earnings

Shares in the US and Europe saw big gains on Wednesday,

following a raft of strong company results which have boosted hopes of a sustained economic recovery.

The FashionUnited Top 100 1269.63 rose by 22.81 points whereas US Dow Jones index closed at a near three year high - up 1.5% at 12,454 points - while the UK's benchmark FTSE 100 closed up 2% at 6,013.01.

Shares in beauty and fashion group LVMH benefited for the second day from better-than-expected revenues, revealed on Tuesday. Its shares closed up 2.3%. Good spirits also reached L´Oreal, which shares rose 2.8% as it reported particularly strong growth in the US and emerging markets.

In the meantime, Sharecast reported UBS to raise its numbers for luxury fashion brand Burberry after a bullish conference call that suggested another strong year ahead. The broker expects another year of solid underlying top-line growth heading into 2012: retail is said to benefit from a 12-13% increase in selling space and continued momentum from the Chinese business; mid-teens growth expected in wholesale in the first half; and licenses are predicted to grow in mid-single digits.

Driven by an estimated 2% beat to its 2011 forecasts - and reflecting some operating leverage - the broker ups its adjusted pre-tax profit estimates for 2011 by 3% to £300m, “broadly in line with management’s comments that numbers will be at the high of consensus,” said analyst Eva Quiroga. Reflecting these increases, the broker raises its target price to 1,200p, from 1,150p, and keeps its ‘buy’ rating.

Last but not least, Foot Locker just hit a new multi-year high after climbing higher with the market for the last month. With four consecutive earnings surprises and a bullish growth projection, pointed out Zacks analysts for Forbes. The retailer of athletic footwear and apparel worldwide was founded in 1879 and has a market cap of $3.25 billion. “It is scheduled to report its fourth quarter results in late May, but if its third quarter results from February are any indication, shareholders have reason to be optimistic”, summarized experts from Zacks.