Burberry (LON: BRBY) jumped 12% on Friday after reporting better-than-expected Q3 results. While comparable store sales fell 4%, this was far narrower than analysts’ forecast of a 12% drop, signaling early signs of a turnaround.
The strong performance was largely driven by robust U.S. holiday demand, with improving sales trends also seen in China and other key regions.
Focus on Signature Products Paying Off
Since taking the helm six months ago, CEO Joshua Schulman has doubled down on Burberry’s iconic items, including trench coats and cashmere scarves. This holiday strategy resonated with customers, with December traffic increasing for the first time in over two years.
“We’re pleased with the results,” Schulman said. “We’re seeing increased brand interest and new customer growth—key pillars of our strategy.”
Regional Breakdown:
-
Americas: +4%
Boosted by strong sales in New York’s 57th Street store, where high-ticket items like a $13,900 mohair-trimmed coat drew luxury buyers. -
Asia-Pacific: -9%
A notable improvement from -28% in the previous quarter, with early signs of stabilization in China. -
EMEIA: -2%
Also showing progress from a -10% drop last quarter.
CFO Kate Ferry noted that December markdowns helped clear inventory while maintaining healthy full-price sales.
Outlook & Industry Context
Burberry now expects to return to profitability this fiscal year, recovering from an earlier £41 million loss. Total Q3 retail revenue reached £659 million, down from £706 million year-on-year.
Analysts from RBC and Citi called the results “a step in the right direction,” echoing broader optimism in the luxury sector, supported by strong reports from Richemont and Brunello Cucinelli.
What’s Next?
Burberry will showcase its Fall/Winter 2025 collection at London Fashion Week on Feb 24. Meanwhile, speculation continues around creative director Daniel Lee, with rumors swirling about a potential move to Jil Sander.
As the brand gains traction in critical markets like the U.S. and China, Schulman’s revival strategy appears to be gaining momentum.