* H2 underlying revenue up 2 percent
* Expects 2008/09 profit in middle of range of market hopes
* Expects H1 2009/10 wholesale revenue down 25 percent
* Shares up 11.8 percent at 0849 GMT after fall on Monday
(Adds further details throughout)
By James Davey
LONDON, April 21 (Reuters) - British luxury goods group Burberry said revenue growth slowed and margins came under pressure in the second half but its full-year profit would still come within the range of market expectations.
The 153-year-old maker of raincoats and handbags said revenue increased 2 percent to 663 million pounds ($961 million) at constant exchange rates in the six months to March 31, implying sales dropped in the fourth quarter.
Sales rose in the first half by 13 percent and were up 9 percent in the third quarter. However, analysts had expected a drop in the fourth quarter, with forecasts for second-half growth at zero to 1.5 percent.
On a reported basis sales increased 21 percent, boosted by a positive foreign currency impact.
But Burberry, known for its camel, red and black check pattern, said a lower proportion of sales at full price meant the pressure on the second-half gross margin was "above that previously indicated".
As a result adjusted profit before tax for the year to end-March 2009 is anticipated to be around the middle of the current range of market expectations.
Chief Financial Officer Stacey Cartwright told reporters analysts were forecasting an underlying pretax profit of 162 million to 185 million pounds.
"A positive surprise on fourth-quarter retail sales has clearly been delivered at the expense of margins which appear to be down between 600 and 1000 basis points," said Katharine Wynne, analyst at Investec Securities in a research note.
Shares in Burberry, which fell 10 percent on Monday, were up 39 pence, or 11.8 percent, at 370.75 pence at 0940 GMT, valuing the business at 1.77 billion pounds.
The stock has increased in value by 74 percent in the last three months, outperforming the DJ Stoxx European personal and household goods sector index by 36 percent.
Burberry said retail revenue increased 14 percent in the second half, with the U.S., Europe and Spain all performing better in the fourth quarter than the third. It forecast a 10 to 12 percent increase in selling space in 2009/10.
Wholesale revenue declined 11 percent in the second half as department store customers reduced orders, and was forecast to fall 25 percent in the first half of 2009/10.
Cartwright said she did not think investors would be alarmed by this forecast.
"We've been flagging that autumn '09 is the first season where us internally as well as our wholesale partners have the opportunity to rebase their inventory levels to current sales trends," she said.
"A lot of U.S. department stores have been saying they'd be procuring 15, 20, 25 percent less than they did last year."
Burberry's licensing revenue fell 13 percent in the second half and was forecast to fall by 10 to 15 percent in the current year.
Retailers across the world are struggling as consumers cut spending amid fears of a long and deep recession and rising unemployment.
Last week Italian luxury group Bulgari forecast a first-quarter loss, although last month French luxury group Hermes said trading was holding up well.
Burberry said in January that profit in 2009/10 would be underpinned by about 50 million pounds of cost cuts.
The group has also secured a new banking agreement, giving 260 million pounds of facilities which run to 2011 and 2012. ($1=.6896 pounds) (Editing by Greg Mahlich)