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Burberry’s shares jumped as much as 15 per cent on Friday after the British luxury group reported a lower than expected fall in sales over the festive period, boosted by US shoppers splashing out on high-end fashion.
Burberry, which is in the middle of a turnaround, reported on Friday that comparable store sales fell 4 per cent in the 13 weeks to December 28, beating analysts’ expectations of a 12 per cent decline.
Chief executive Joshua Schulman, who is aiming to refocus the brand on classic outerwear products such as its staple trenchcoats and scarves, said: “We recognise that it is still very early in our transformation and there remains much to do.”
Burberry said it was now more likely that it would avoid a full-year operating loss for the 12 months to March.
Sales in the US rose 4 per cent in the third quarter, driven by a strong performance in New York, mirroring a similar pattern at Swiss luxury group Richemont, whose quarterly trading was also boosted by demand in the US.
James Grzinic, an analyst at Jefferies, said Burberry had benefited from an improvement in the wider industry, which was being “driven by a pullback in US sales turning into a catch-up post-elections”.
Finance chief Kate Ferry said it was too early to comment on the threat of US tariffs on European products under President Donald Trump but added: “America is certainly a real opportunity. We’re really pleased with our recent performance there, [but] we are also a global company.”
Sales in Europe, the Middle East and Africa fell 2 per cent. Revenues in the Asia-Pacific region were 9 per cent lower, dragged down by a 7 per cent decline in mainland China — once a key driver of growth for the luxury sector.
Schulman said that Asia-Pacific, which accounts for almost half of group sales, “continues to be a top priority for us” and the company was seeing some signs of stabilisation in China in terms of trade.
Ferry added that EMEIA was “still choppy, and within that, the UK was slightly weaker than some of the regions”.
Retail revenue fell to £659mn compared with £706mn in the same quarter in 2023.
Schulman joined Burberry in July to arrest a decline in sales after a botched strategy to move upmarket.
In November he vowed to “act with urgency” to stabilise the brand as it swung to a half-year loss.
Burberry declined to comment on whether designer Daniel Lee’s contract was up for renewal or whether he would leave for another brand amid industry speculation that he might. Lee was hired by previous chief executive Jonathan Akeroyd as chief creative officer to focus on the “Britishness” of the 169-year-old brand.
Schulman set out a £40mn cost-saving plan and a £3bn annual revenue target, without setting an explicit timeline to achieve the latter goal. He said he wanted Burberry to have a broader range of price points, including lower ones in certain categories such as leather handbags, and to sell more staples such as trenchcoats.
Schulman has insisted, however, that Burberry would continue to be a luxury brand and that he has “no plans to [turn] Burberry into an accessible luxury brand”.
