Dive Brief:
- Burberry Group retail revenue for the third quarter of fiscal 2025 dropped 7% year over year to 659 million pounds, or about $823 million, according to a Friday release. The news caused the company’s stock to rise nearly 10% as of press time.
- Comparable store sales for the period, which the company measures at constant exchange rates, dropped 4%, beating a 12% decline previously predicted by analysts.
- In the Americas, comparable store sales rose 4%. That was offset by a 9% drop in the Asia Pacific region and a 2% drop in the region comprising Europe, the Middle East and Africa.
Dive Insight:
When Burberry appointed CEO Joshua Schulman in July 2024, the luxury brand was at a critical juncture, which began with a profit warning issued at the beginning of the year and continued with a 34% reported profit drop for fiscal 2024.
Schulman, who previously served as CEO of Michael Kors and CEO and president of Coach, assumed his role two days after Burberry posted a 22% revenue drop for the first quarter of fiscal 2025.
The company’s turnaround plan, called “Burberry Forward,” was announced at the same time the company posted a 22% H1 revenue decline in November.
In Friday’s earnings release, which covered the quarter ended Dec. 28, 2024, Schulman said that since that plan was launched, Burberry has worked to create more consumer interest in the brand while improving the company’s performance and creating long-term value.
“We are encouraged by the response to our ‘It’s Always Burberry Weather’ outerwear campaign and ‘Wrapped in Burberry’ festive campaign,” Schulman said. “These activations resonated with a broad range of luxury customers leading to an improvement in brand desirability and strength in outerwear and scarves.”
Schulman said improvement in the company’s core categories was evidence that “Burberry has the most opportunity where [it has] the most authenticity.” However, he added that the company’s transformation plan is still in the early stages “and there remains much to do.”
Burberry’s positive retail sales in the Americas came alongside enhanced marketing in the region surrounding the reopening of a refurbished store in New York. Meanwhile, the company said a 7% decline in China and low double-digit declines in both South Korea and the South Asia Pacific were not enough to offset a 4% increase in Japan, leading to an overall decline in the Asia Pacific region.
Outerwear and scarves “continued to outperform globally,” per the release.
Looking ahead, Burberry said in the release that it’s “acting with urgency to stabilise the business and position the brand for a return to sustainable, profitable growth, supported by strong cash generation and balance sheet strength.” The company added that it was optimistic in regards to its strategic plan and encouraged by the response from both customers and business partners over the holiday season.
“In light of our Q3 performance, it is now more likely our second-half results will broadly offset the first-half adjusted operating loss, notwithstanding the uncertain macroeconomic environment,” the company said.
