Burberry soars in London as half-year sales and profits exceed forecasts

(Il Sole 24 Ore Radiocor)- Burberry takes centre stage on the ‘red carpet’ at the London Stock Exchange, thanks to the excellent reception given to its half-year results. As market participants note, Burberry announced higher-than-expected sales and profits in the second quarter and in the first half of the 2027 financial year, confirming the progress of its turnaround strategy at a time when the luxury sector is struggling to revive demand. The British group recorded a 4 per cent increase in like-for-like sales in the second quarter (and in the first half of the financial year), which ended in September, whilst consensus estimates had pointed to a 3 per cent rise. Revenue for the first half of the financial year reached £1.1 billion, compared with £1.03 billion the previous year, whilst operating profit rose to £54 million, compared with an operating loss of £18 million, with a margin of 5 per cent compared with -1.7 per cent. Adjusted operating profit for the first half of the year also jumped to 62 million pounds (from 19 million), exceeding analysts’ average estimate of 44 million. Net profit attributable to shareholders amounted to £6 million, compared with a loss of £26 million in the previous financial year.

“Two years ago, we launched Burberry Forward. Today, our brand and our business are stronger. Five consecutive quarters of growth and improved sales quality demonstrate that our strategy is working,” said Joshua Schulman , Burberry’s CEO, referring to the strategic plan launched in 2024 with the aim of rekindling consumer interest in the brand’s classic British style, whilst reducing costs. Indeed, as industry observers note, whilst sales at luxury giants such as LVMH and Kering are struggling to grow, Burberry, which is much smaller in scale, has increased like-for-like sales in the Americas (+11 per cent in the second quarter and +12 per cent in the half-year), the United States and China (+5 per cent and +7 per cent respectively). The EMEA region, on the other hand, recorded a 2 per cent decline in both the quarter and the half-year ‘due to lower tourist activity’. Excluding the Middle East, the decline was 1 per cent. At product level, the Outwear segment recorded double-digit growth thanks to raincoats, but other product categories are also growing.

As for the outlook, Burberry states that ‘the current momentum gives us confidence that we will continue to drive performance and deliver sustainable long-term growth’. For 2027, the company expects to make “further progress towards its financial targets, including growth in revenue and margins”. At the same time, Burberry “remains mindful of the uncertainty in the external environment”. Burberry’s plan to turn the business around is gaining credibility, say analysts at Citi, citing the higher-than-expected second-quarter sales growth, five consecutive quarters of growth, and the solid performance of the wholesale division, against a challenging backdrop for the luxury sector. Citi maintains its ‘buy’ recommendation on the share. “The recovery continues,” noted analysts at Bernstein, reaffirming their ‘outperform’ rating and a target price of 1,300 pence. The performance in the first half of the year “confirms the progress made since the brand returned to its historic identity”, added Jefferies, whilst maintaining an “underperform” rating on the share with a target price of 940 pence.