Burberry reported a smaller-than-anticipated decline in comparable retail sales for its fiscal first quarter, offering investors an early glimpse of progress in the British luxury brand’s turnaround plan.
According to the company’s consensus, comparable store sales fell 1% in the last quarter ending June 28. This was better than analyst expectations for a 3% drop.
The shares of the trench coat maker soared after the announcement. They gained 6.45% at midday London Stock Exchange.
Stocks are up 36% in one year, thanks to growing investor confidence.
Burberry reported sequential improvements in all regions. Total retail sales for the quarter totaled PS433 millions ($581million).
Since five consecutive quarters, the company has seen its quarterly revenue grow.
This latest update is a modest, but positive development for the luxury brand. It has suffered from a global slowdown of luxury consumer spending.
Schulman’s Brand Reboot is showing Results
Joshua Schulman has launched a brand reboot, focusing on the core categories of outerwear, scarves and British heritage.
The company’s new Autumn 2025 collection is being well received, Schulman stated in a press release.
In recent years the company faced challenges, has issued multiple warnings about profits and struggled to maintain its growth in important markets.
Schulman’s plan includes plans to reduce around 20 percent of its global workforce. This is a cost-cutting move aimed at improving operational efficiency and streamlining the organization structure.
Kate Ferry, Burberry’s Chief Financial Officer noted that the Chinese market is showing signs of growth.
The sales in China dropped 5% in the third quarter, a slight improvement over the 8% decline recorded during the previous three months.
US recovery boosts confidence
The Americas was one of the highlights in Burberry’s latest update, with sales up 4% on a year-on-year basis.
The decline was 4% in the quarter before and it would be a drop of 9% in 2025.
Schulman attributes the recovery to the broader appeal of luxury consumers in the US. This includes top spenders as well as shoppers who are looking to improve their lifestyles at malls with high traffic.
Burberry now has a global market share of nearly one fifth.
The CEO Joshua Schulman stated that the increase in sales was due to the diversity of luxury consumers that exist on the market, from high-spending elites to mall-goers who are high traffic.
Burberry accounts for 19% its business in the US.
The turnaround strategy is a hit with analysts
UBS noted that the brand’s momentum is accelerating.
Piral Dadhania, a senior analyst at RBC Capital Markets and Richard Chamberlain noted that Burberry’s quarterly revenue has been improving for the past five quarters.
They added that a strategy shift towards outerwear would offer more authenticity and a product with fewer competitors.
Bernstein’s analysts expressed similar enthusiasm, writing “this is encouraging that the self-help programme is moving in the correct direction,” adding that further gains could be expected as the firm refines its product and marketing strategy.
The mood at Burberry seems cautiously positive as Schulman finishes his first year in charge.
Although challenges still remain, particularly in China and Europe, the early signs of recovery as well as investor responses suggest that the company’s attempts to correct its course may be gaining momentum.
The post Burberry’s Soft Sales Drop Sparks Sharp Stock Rise, Analysts Cheer Signs of Revival may be updated as new developments unfold.