Luxury brand Burberry Group Plc on Wednesday reported an 11 percent increase in sales for the first quarter with growth in retail and wholesale businesses, amid a challenging economic environment. The stock is falling nearly 5 percent in early morning trade.

Total revenue for the quarter climbed to 408 million pounds from 367 million pounds in the prior year. Underlying revenue growth, calculated at constant exchange rate, also was 11 percent.

Angela Ahrendts, CEO, said, ”With continued brand momentum, Burberry has delivered a robust first quarter. Revenue was up 11% against a more challenging external environment. Sales in retail, now about 70% of the business, increased by 14%, with initiatives to elevate brand equity balanced by improved store productivity and new space.”

Retail revenue improved 14 percent to 280 million pounds. In mainline, average selling prices increased, driven by product innovation, higher penetration of Burberry Prorsum and London and rationalization of opening price point products in core outerwear and accessories.

The business reported a 6 percent increase in comparable store sales with strong mainline growth in the UK, France, Germany and Greater China. Mainland China delivered double-digit comparable growth, with a particularly strong Beijing.

The company opened six mainline stores during the quarter, including the fourth store in Brazil and Russell Street in Hong Kong. Openings are planned later this year in London, Milan, Chicago, Hong Kong and Shanghai. In the year ending March 31, 2013, a 12-14 percent increase in average retail selling space is planned, with a shift from smaller to larger format stores.

Wholesale revenue advanced 8 percent to 102 million pounds and benefited from earlier deliveries. Burberry noted that the business performed in line with the guidance of a mid single-digit percentage increase in underlying wholesale revenue for the six months to September 30.

In the Licensing business, revenue slid 2 percent to 26 million pounds, as the quarter was impacted by phasing of license terminations. The company still sees full year revenues from the business broadly unchanged from last year.

Geographically, all regions reported revenue growth with Asia Pacific reporting a 20 percent increase and Europe recording a 10 percent improvement.

Ahrendts added, ”Building on our balanced business model and strong operational foundation, we continue to invest in our retail, digital and marketing strategies to drive long-term sustainable growth, while remaining responsive to the changing external environment.”

Jeans giant Levi Strauss & Co. on Tuesday reported a 37 percent decline in profit for the second quarter, after being hit by falling revenues in Asia and Europe reflecting a weak global economy, higher cotton prices and the negative impact of currency.

The privately-held clothing company designs and markets jeans, casual wear and related accessories for men, women and children under the Levi’s, Dockers, Signature by Levi Strauss & Co., and Denizen brands.

Chip Bergh, president and chief executive officer of Levi Strauss & Co said, “It is clear that the economic headwinds are getting stronger. While our business grew in the Americas, primarily driven by our own retail stores, Europe continues to be a challenge, and for the first time in two years our business in Asia declined.”

Bergh added, “In the face of these tougher economic conditions, we are rationalizing our business, reducing operating costs and focusing our resources on the opportunities that will have the most impact in growing shareholder value.”

The company’s gross margin for the quarter was 46 percent of revenues, down from 49 percent in the year-ago period.

The decline in gross margin was primarily due to higher-priced cotton, which were not fully covered by price increases. However, margin benefited from increased revenues from the company’s retail network and a decline in sales to lower-margin channels, reflecting the company’s tighter inventory position

San Francisco-based Levi Strauss’ net income for the second quarter was $13.23 million, down from $20.97 million in the year-ago period.

The decline in net income reflects a lower gross margin due to the higher cost of cotton, and a debt extinguishment charge of $8 million.

The debt extinguishment charge was incurred as the company completed a successful refinancing of $400 million of its debt, taking advantage of lower interest rates and extending its bond maturity profile.

The company’s net revenues for the quarter declined 4.2 percent to $1.05 billion from $1.09 billion in the prior-year period, primarily due to a decline in sales in Asia Pacific and Europe. Net revenue declined 1 percent on a constant currency basis.

Levi Strauss’ net revenues increased 1 percent in the Americas, primarily reflecting higher revenues from the company’s Levi’s brand retail stores and increased sales of Denizen as well as Signature brand products.

However, net revenues in Europe declined 10 percent on a reported basis, primarily due to a lower volume of sales to the traditional wholesale channels and to franchisee stores, reflecting the ongoing depressed retail environment, most notably in southern Europe.

Net revenues in Asia Pacific decreased 12 percent on a reported basis as the company’s key markets, such as India and China, faced increased economic challenges.

Levi Strauss’ net debt at the end of the second quarter was $1.5 billion, down from $1.8 billion at the end of 2011. The company’s total liquidity position was $864 million.