Soaring demand for luxury goods in China and online growth helped Burberry beat the trend of declining high street footfall as it posted a 12% like-for-like sales increase over the key Christmas period. Shares climbed strongly after better-than-expected retail revenues of £528 million for the third quarter to the end of December.

Outerwear - which includes the brand's signature trench coats - together with large leather goods contributed about half of the growth while men's accessories and tailoring also performed strongly.

It said stores continued to be hit by "weak" footfall reflecting a trend across the sector but digital sales outperformed, after investment in collect-in-store services.

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Chief executive Angela Ahrendts - due to leave later this year - said: "In the all-important festive period, we are pleased with our 12% comparable sales growth, which was in line with expectations."

She hailed Burberry's continuing strong brand momentum and the impact of a planned increase in marketing investment.

But she warned that exchange rates would be a "significant headwind in the second half and beyond" while the wider economic climate remained uncertain.

Burberry said its Asia Pacific region saw double-digit percentage comparable sales growth, led by China and continued improvement in Korea.

The Americas and the Europe, Middle East, India and Africa zone also saw growth. Performance in the UK, France and Germany was "robust" but Italy remained weak.

During the period, Burberry opened five net stores including two in China, a fourth in Mexico, and its first standalone beauty store in London's Covent Garden.

The company said its outlook remained unchanged as it aimed for a modest increase in operating margins for the full year.

Richard Hunter, head of equities at stockbrokers Hargreaves Lansdown, said: "Burberry has trounced expectations and the share price is racing ahead as a result."

He said the group benefited as both bargain price and higher end retailers performed well over Christmas and the New Year, to the exclusion of the mid-market.

Mr Hunter added: "Burberry has the additional advantage of its exposure to the emerging middle classes in the likes of India and China.

"In addition, it is beginning to take its online presence much more seriously, a factor which again has been symptomatic of those retailers currently enjoying success."

The 158-year-old business has 218 retail stores, 216 concessions, 55 outlets and 68 franchise stores.