Burberry posts 5% Q1 revenue gain as turnaround gains traction

Burberry reported its first quarterly revenue growth in more than three years, with retail sales rising 5% to £455 million in the 13 weeks to June 27.

"Our strategy is working. We are attracting a broad range of luxury customers across product categories, channels and geographies," Chief Executive Officer Joshua Schulman said.

Comparable sales grew 5% year over year, with all major product divisions — womenswear, menswear, accessories and childrenswear — returning to growth for the first time since 2023. The Americas led regional performance with a 12% gain, followed by Greater China at 9% and South Korea at 11%. Japan declined 2% as Chinese tourist spending weakened, while Europe, the Middle East, India and Africa fell 3% as the Middle East conflict continued.

The results mark a turning point for the 170-year-old British luxury house, which swung to a £115 million operating profit in fiscal 2026 from a £3 million loss the prior year. The company has closed 21 underperforming stores and plans to cut about 1,700 jobs by 2027 as part of its "Burberry Forward" restructuring.

Outerwear led product performance with double-digit growth, driven by heritage rainwear, lightweight jackets and seasonal items. The "Portraits of an Icon" campaign helped attract 19% more new rainwear customers during the quarter. Women's handbags returned to growth, while knitwear, polo shirts and swimwear also posted gains. Gen Z customer growth rose by double digits.

Ecommerce expanded by mid-teens during the period. Burberry raised its first-half wholesale guidance by a high-single-digit percentage after what it described as a positive response from wholesale partners. The company expects to deliver full-year revenue growth and margin expansion in line with market expectations, though it cautioned that geopolitical and macroeconomic uncertainty could weigh on consumer confidence.

Cost-cutting initiatives generated £80 million in savings during fiscal 2026, with a target of £100 million in annualized savings by fiscal 2027. Total capital expenditure for the current year is projected at about £120 million.

The guidance raise signals management expects the turnaround to build momentum through the remainder of the fiscal year. Investors will watch the next quarterly update for evidence that cross-divisional growth can be sustained as macroeconomic headwinds persist.

This article is for informational purposes only and does not constitute investment advice.