Burberry announced higher fourth-quarter sales, with comparable retail sales rising 5% in the three months ending March 28, bringing annual growth to 2%. This performance aligned with analysts' expectations. The company, under CEO Joshua Schulman since July 2024, focused on its signature trench coats and British heritage to attract younger shoppers, while also implementing cost-cutting measures, including laying off 1,700 staff, or one-fifth of its global workforce, a year prior.
While the Americas and Greater China regions both experienced a 10% sales growth, attributed to "reignited brand momentum" and a marketing push targeting Gen Z consumers, sales in the Europe, Middle East, India, and Africa (EMEIA) region fell by 2% in the fourth quarter. This decline was primarily linked to the Iran war and a subsequent slump in tourism, with reduced tourist activity alongside surging energy costs impacting the broader luxury market.
Operating profit for the year rebounded significantly to £115 million, compared to a loss of £3 million in the previous year. This improvement led Schulman to declare the financial year as a "meaningful inflection point" as the company returned to profitable sales growth. However, despite the recovery, Burberry chose not to reinstate its annual dividend, though finance chief Kate Ferry indicated intentions to do so without specifying a timeline. The company aims to return to annual sales of £3 billion.
JPMorgan analysts described Burberry's results as "good, but maybe not good enough," citing concerns about the pace of recovery in China and muted performance in EMEIA and Asia Pacific. Shares in Burberry dropped 6.5% after the announcement, contributing to a 14% loss year-to-date, reflecting investor apprehension about the long-term sustainability of the turnaround amid a challenging global luxury market and an uncertain geopolitical outlook. Bridgepoint founder William Jackson is set to succeed Gerry Murphy as Burberry's chair later in the year.
