LONDON – Burberry is bouncing back, with a return to growth at its retail stores and an improving overall performance at the top and bottom line in the first half ended Sept. 27.
Burberry said Thursday that underlying retail sales grew 2 percent in the second quarter, the first time in two years that it has reported growth at its stores. In the first quarter, retail sales were down 1 percent.
The news sent the share price up more than 4 percent to 13.06 pounds at 9:00 a.m. GMT.
In the six months, underlying retail sales were flat, compared with a 20 percent decline in the corresponding period last year.
First-half revenue was down 5 percent at reported rates, and 3 percent at constant exchange to 1.03 billion pounds, narrowing steadily under chief executive officer Joshua Schulman.
Since Schulman joined in 2024, he has breathed new life into Burberry classics, put a strong accent on the brand’s British heritage and forged alliances with local celebrities, talents and tastemakers to revive the brand under the overarching Burberry Forward strategy.
On Thursday, Schulman said that one year into the new strategy “my belief in this extraordinary British luxury house is stronger than ever. With the consistency of our ‘timeless British luxury’ brand expression and an improved product offer, we have begun to see customers return to the brand they love, resulting in comparable store sales growth for the first time in two years.”
He added that while it’s still early days and there is more to do, “we now have proof points that Burberry Forward is the right strategic path to restore brand relevance and value creation. We move forward with confidence that Burberry’s best chapters lie ahead.”
In the six months, adjusted operating profit amounted to 19 million pounds compared with a loss of 41 million pounds in the corresponding period last year.
The company reported an operating loss of 18 million pounds, compared with a loss of 53 million pounds in the previous year. The company said the loss in the first six months was due to a restructuring charge of 37 million pounds.
Burberry saw modest growth in all the major regions. EMEIA, which covers Europe, the Middle East, India and Africa, was up 1 percent in the half, while the Americas rose 3 percent in the first six months.
Greater China improved, with sales shrinking 1 percent the half, while Asia-Pacific revenues fell two percent.
Luca Solca, luxury analyst at Bernstein, said that both comparable store sales and operating profit were both slightly higher than expected.
“We see that Burberry is slowly but surely moving in the right direction,” he wrote in a report following Thursday’s announcement.
“The trend should continue – we expect – as damage from heavy discounting is left behind and the new vision takes full shape in the (fall-winter) collections. With the market’s strong appetite for self-help, we believe this should be taken the right way,” Solca added.
