Burberry shares rise 7% as interim profit and sales beat expectations

Burberry Group PLC on Thursday said another quarter of growth shows its strategy is working as it reported a return to profit and improved sales, with advances across the business.

The London-based luxury goods brand reported pretax profit of £19 million in the 26 weeks that ended September 26, swinging from a £48 million loss a year prior.

Adjusted operating profit jumped to £62 million from £19 million, beating £44 million company-compiled consensus, with the adjusted operating margin improving to 5.7% from 1.9%.

Adjusted diluted earnings per share rose to 3.4 pence from 0.6p, in line with market consensus.

Revenue increased 6.8% to £1.10 billion from £1.03 billion a year earlier, ahead of £1.08 billion consensus.

Comparable retail sales grew 4.0% in the first half and the second quarter, marking five consecutive quarters of growth, while wholesale revenue rose 17%.

"Five consecutive quarters of growth and improved quality of sales demonstrate that our strategy is working," claimed Chief Executive Officer Joshua Schulman.

The CEO launched the 'Burberry Forward', strategy back in November 2024, aiming to re-anchor the brand in its classic British heritage, such as trench coats and scarves.

Shares in Burberry were up 7.2% to 1,171.50 pence each in London on Thursday morning, the best performer in the FTSE 100 index, which was up 0.3%.

Burberry said retail sales of Womenswear, Menswear, Childrenswear and Accessories all grew in the first half of the financial year.

It reported double-digit Outerwear sales growth, strength in Leather goods with an acceleration in the second quarter, and a mid-teens percentage rise in e-commerce sales.

By region, comparable sales increased 12% in the Americas in the first half from a year before, 7% in Greater China, and 3% in Asia Pacific, but fell 2% in Europe, the Middle East, India & Africa.

The EMEIA sales decline was due to the continued impact of reduced tourist activity and weak traffic trends in Middle East, particularly in the outlet channel, Burberry said. Excluding the Middle East region, EMEIA sales declined by 1% in the half-year.

Burberry expects further revenue growth and margin expansion in financial 2027, which ends in March, while saying it remains mindful of the uncertain external environment.

Ahead of the half-year results, company-compiled consensus had forecast full-year revenue of £2.54 billion, up 4% on-year at constant currency, with 4% retail growth.

Consensus had projected adjusted operating profit of £245 million and adjusted diluted EPS of 38.3p.

CEO Schulman said: "Having laid the foundations for growth, I am more confident than ever that we will realise the full potential of this extraordinary British luxury brand."

The company will host a capital markets day in London for investors and analysts in March, with the date to be confirmed.

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