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Burberry sales edge lower but ‘encouraged’ by turnaround so far

ALN

Burberry Group PLC on Friday reported that its sales decline eased during the first quarter, helped by ‘stronger brand desirability, outperformance in outerwear and scarves’.

Shares in the company rose 1.7% to 1,269.00 pence in early trade in London on Friday.

The London-based luxury goods maker said it is ‘in the early stages of our turnaround’ and the wider market backdrop is uncertain.

‘Our focus this year is to build on the early progress we have made in reigniting brand desire, as a key requisite to growing the topline. In the first half we are continuing to prioritise investment and expect to see the impact of our initiatives build as the year progresses. We will deliver margin improvement with a continued focus on simplification, productivity and cash flow,’ Burberry said. ‘We remain confident that we are positioning the business for a return to sustainable, profitable growth.’

In the first quarter ended June 28, retail revenue declined around 5.5% on-year to £433 million from £458 million. At constant exchange rates, it fell 2%.

Comparable store sales fell 1%, easing from the 6% fall suffered in the fourth quarter of the prior financial year. Bloomberg reported that for the quarter just ended, a 3.7% drop was expected by analysts. Over the course of all of financial 2025, which ended in March, comparable store sales slumped 12%.

In the Europe, Middle East, India & Africa grouping, comparable store sales edged up 1%, while in the Americas, growth was 5%. The Greater China region saw a 5% fall in comparable store sales, while in the wider Asia Pacific region, it fell 4%.

Asia Pacific includes Japan, South Korea, Southeast Asia, Australia and New Zealand, Burberry explained. Greater China comprises Hong Kong, Macau, Taiwan and Mainland China.

Local spend boosted its sales in EMEIA, though Burberry noted a decline in tourist spend. ‘New customer growth’ improved sales in Americas.

In the Greater China region, there was a 4% comparable store sales fall in Mainland China alone. Burberry said.

‘Asia Pacific was down 4% with challenging performance in Japan, partially offset by growth in South Korea,’ it added.

Burberry Chief Executive Officer Joshua Schulman said: ‘Over the past year, we have moved from stabilising the business to driving Burberry Forward with confidence. The improvement in our first quarter comparable sales, strength in our core categories, and uptick in brand desirability gives us conviction in the path ahead. Our autumn 2025 collection is being well received by a broad range of luxury customers as it arrives in stores. Although the external environment remains challenging and we are still in the early stages of our transformation, we are encouraged by the initial progress we are starting to see.’

Schulman is roughly one year into his stint as CEO. Schulman, once of US fashion brand Michael Kors, replaced Jonathan Akeroyd who spent just two years in the role. Akeroyd had joined Burberry as CEO only in April 2022. The former head of Italian fashion house Gianni Versace Spa and British peer Alexander McQueen had replaced Marco Gobbetti in the Burberry hot seat.

The company unveiled its ‘Burberry Forward’ strategic plan back in November. The firm, famed for its trench coats and check print, aimed to reignite the brand by returning to its roots as a quintessentially British luxury house.

‘Today’s luxury customer craves authenticity. As the only British luxury brand with such strong foundations, we have a competitive advantage,’ the company said in November.

In May, it announced new cost-cutting measures. Burberry said its strategic plan is expected to unlock an additional £60 million of savings by financial 2027, in addition to the £40 million cost-savings programme already announced. This could see the loss of 1,700 jobs, the firm said at the time.

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