The company reported pre-tax profits of £88 million for the year to March, a sharp reversal from a £67 million loss a year earlier, according to Refinitiv data. Shares have climbed 70% over the same period, reflecting growing investor confidence in the recovery. Schulman, who took the helm a year ago, has driven a strategic reset under the 'Burberry Forward' plan, which aims to reignite brand desire by refocusing on the label's heritage in outerwear and scarves.
'Burberry Forward is the right strategic path to restore brand relevance and value creation,' Schulman said. The brand had lost focus on its core outerwear category and core customer segments, and had moved too far from its heritage, he added. Burberry Group PLC attributed recent underperformance to inconsistent brand execution, a focus on seasonal fashion with a niche aesthetic, and pricing that did not align with category authority.
The financial year marks a 'meaningful inflection point' for Burberry.
Progress was evident in results for the six months to September, when quarterly sales grew for the first time in nearly two years, with a 2% rise in the second quarter. That growth was predicated on improved performance in China, where sales grew 3% year-on-year after falling 5% in the first quarter. Investors are pleased with early signs of recovery even though sales are still falling, according to Reuters.
Analysts expect comparable retail sales to fall 3% in the April-June quarter year-on-year, an improvement from a 6% fall in the January-March period, according to a consensus provided by Burberry. The contrasting reports may reflect different time periods or metrics, causing some uncertainty about the actual momentum of the recovery. 4 billion, down 2% from last year, according to major media reports.
Burberry is 'firmly positioned' for long-term growth.
Overall sales growth was 2% in the year to March, according to major media reports. 9 pence loss per share last year, but below expectations of 20 pence per share, according to major media reports. Regionally, Greater China saw 4% year-on-year sales growth, according to major media reports, with growth surging as high as 10% in the three months to March.
Sales were flat in Europe, Asia and the Middle East, but jumped 4% in the Americas and Asia Pacific overall, according to major media reports. Cost-cutting measures have been central to the turnaround. Burberry secured £80 million in cost savings during the year, with a target of £100 million by next annual results, according to major media reports.
I am mindful of the uncertain macro-economic environment and its potential to dampen consumer confidence.
The company announced around 1,700 job cuts and removed the night shift at its Yorkshire raincoat factory last year, according to major media reports. It also opened 9 stores and shut 21, leaving 410 directly operated locations, according to major media reports. How Burberry will achieve the remaining £20 million in savings remains unclear.
Marketing under Schulman has drawn on British heritage in a contemporary way, according to Dan Carter of Phoenix Asset Management Partners. The brand launched a 'Burberry Festival' campaign timed to Glastonbury music festival, featuring Loyle Carner, Goldie, and Cara Delevingne. Its image was also helped when Cher, Romeo Beckham, and Rosie Huntington-Whiteley wore its outfits at the Met Gala.
Burberry Forward is the right strategic path to restore brand relevance and value creation.
Burberry has moved away from high-priced bags and introduced more affordable models, driving the average bag price down by 9% since October 2023, according to Luxurynsight pricing analysis. How the pricing strategy will evolve and impact margins is yet to be seen. Chair Gerry Murphy is retiring and will be replaced by William Jackson in November, according to major media reports.
Investors will want news on reaching the cost savings target and progress in China and Asia, according to This is Money. 5% to 1,168 pence on Wednesday, according to major media reports, and are up around 63% since Schulman took the helm, outperforming luxury peers.