Updated at 12:05 p.m. ET May 14
LONDON — With its retail sales on an upward trajectory and profit back in positive territory, Burberry has got its groove back and is striding into the new fiscal year with some optimism.
Less than two years into its Burberry Forward turnaround strategy and against a backdrop of major macroeconomic uncertainty, the company reported a 5 percent uptick in comparable store sales in the fourth quarter.
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In the full fiscal year ended March 28 comparable store sales rose 2 percent — compared with a 12 percent decline last year. Revenue in the 12 months totaled 2.42 billion pounds, flat at constant currency exchange and down 2 percent at reported rates.
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The brand is also back in the black with all profit lines. In 2026, Burberry’s adjusted operating margin rose to 6.6 percent from 1 percent, which the company said was due to higher full-price sell-throughs, lower markdowns and a careful eye on the inventory.
Burberry’s laser-focused marketing efforts have also been paying off with the brand’s two most important markets, Greater China and North America, each delivering 10 percent growth in the fourth quarter. All regions, with the exception of the Europe, the Middle East, India and Africa area, grew in the single digits in fiscal 2026.
“This financial year marks a meaningful inflection point for Burberry,” said Joshua Schulman, chief executive officer, during a results presentation on Thursday. “The strategy is working. With increased brand relevance and product authority, I am more confident than ever that we are firmly positioned for long-term growth and value creation as we progress toward our ambition of returning this business to 3 billion pounds in sales and beyond.”
In the current fiscal year, Burberry plans to deliver further revenue growth and margin expansion in the face of uncertain geopolitical and macroeconomic environment, and its potential impact on consumer confidence.
Capital expenditure will tally 120 million pounds, while annualized cost savings will hit 100 million pounds, the bulk of which was delivered in fiscal 2026. Wholesale is set to grow by a midsingle-digit percentage in the first half.
Analysts were upbeat.
Bernstein said Burberry “continued on a path of gentle improvement” in the fourth quarter, while Citi said the brand had “all boxes ticked,” and its strategy execution was “firmly on track.”
RBC Capital Markets said the year-end and fourth-quarter “results demonstrate continued momentum.”
Kathryn Hannon, senior investment manager at wealth management firm RBC Brewin Dolphin, said Burberry’s return to profitability “is the moment the market has been waiting for, and signals that ‘Burberry Forward’ is delivering structural change.”
She added that revenue of 2.4 billion pounds might look flat year-on-year, “but the quality behind that number tells the more important story — a deliberate pivot away from discounted sales and toward full-price growth that now appears to be working.”
Duncan Ferris of the investment platform Freetrade, said Burberry’s “margin improvement, largely thanks to improved inventory discipline and better quality sales, is encouraging. It demonstrates depth to the business’ recovery efforts beyond just generating more revenue from a weak base.”
Still, investors were unimpressed.
Burberry shares closed down nearly 6 percent to 10.93 pounds on the London Stock Exchange on Thursday, giving the company a market capitalization of 3.95 billion pounds.
Schulman said growth last year came from a cocktail of creativity and commerce, with the brand spending a “high-single-digit” percentage of sales on marketing, including campaigns, special events and activations in the U.S. and China in particular.
The CEO said the key is to have a “consistent drum beat” of global and local events.
Burberry follows up big-ticket campaigns and events — for Golden Week, Lunar New Year, Thanksgiving, Christmas and Mother’s Day — with “hyper-localized” moments.
Last December, the brand tapped the New York-based artist Sarah Morris to reimagine its store facade in the Miami Design District to mark the opening of Art Basel Miami Beach. In March, it popped up at the historic Hotel Jerome in Aspen with a curated edit of pieces, an ice‑skating rink wrapped in the Burberry check pattern and a bar serving hot chocolate in branded cups.
Later this year, the Burberry team will be organizing an event in Nashville and also plans to release a series of short films in collaboration with Chinese National Geography magazine.
“We’ll showcase China’s extraordinary outdoor landscapes and historic sites. It’s a perfect way for us to show different seasonal outerwear in these terrific settings,” he said.
While the U.S. and China were the most lucrative regions in the fourth quarter, South Korea also outperformed, according to Schulman. He said sales in the country, which is consolidated as part of the APAC region, have risen 13 percent in the last two quarters. “We’re seeing strong product acceptance from our customers,” he said.
Burberry’s new “good, better and best” pricing approach and its focus on value has also been driving sales. That should come as no surprise given the aspirational customer’s frustration with spiraling luxury prices in the past years, and the proliferation of stylish, contemporary brands in the U.S., Europe and Asia that offer better value than the big luxury houses.
Schulman said Burberry saw that its cashmere knits were selling out, so it expanded its offer, making cashmere trenches priced at 3,250 pounds, compared with the 7,000 pounds some competitors’ were charging.
Within the Burberry stable, Schulman said there’s a nylon trench priced at 1,095 pounds, the cashmere version at 3,250 pounds and a nubuck leather style for 6,900 pounds. Customers who don’t have that much money to spend can also get a smaller slice of Burberry, buying a skinny silk scarf for 195 pounds, a check cashmere version for 435 pounds or a cashmere cape for 2,550 pounds.
Those strategies, along with a savings drive, helped to bolster operating profit to 115 million pounds from a loss of 3 million pounds. Profit for the year was 21 million pounds, compared with a loss of 75 million pounds last year.
Asked about the Middle East conflict and its impact on sales, Schulman said it has been contained to the region, with some impact on travel in the EMEIA region.
The Middle East itself represents around 2 percent of sales, he said.
In licensing, Schulman is expecting 2027 to be the year when customers will see a “more consistent brand expression” between the fragrance, eyewear and fashion.
Asked about the future of Burberry’s relationship with Coty, Schulman said Burberry is “working constructively with the new management team at Coty. They have reaffirmed their commitment to Burberry, and are strengthening their marketing investment.”
Coty has denied rumored plans to sell Burberry and other brands to rival Interparfums.
The new fiscal year is also bringing some change at the top.
Burberry said in a separate announcement that William Jackson, founder and former CEO of Bridgepoint Group Plc, will replace Gerry Murphy as chair when the latter retires later this year.
Murphy, who joined the board in May 2018, will retire in November. Jackson will join Burberry as a non-executive director on July 1 and will stand for election at the AGM on July 15.
Jackson’s private equity company, Bridgepoint Group Plc, listed on the London Stock Exchange in 2021 and has interests in consumer-facing businesses, including Pret a Manger and MotoGP. He chaired both of those brands throughout their growth years while building the wider Bridgepoint portfolio.
Jackson said: “Burberry has strong foundations, a clear strategic direction, and a talented executive team led by Josh Schulman. I look forward to working closely with Josh and the board to build on this momentum and realize Burberry’s full potential.”
And Murphy added: “It has been a privilege to serve as chair of this extraordinary 170-year-old brand since 2018. I would like to thank board members past and present for their unwavering commitment and continued support. I am very confident that, under William’s and Josh’s leadership, this unique and special business is well positioned for the future.”