Burberry begins its turnaround with signs of momentum returning as cost savings and renewed brand focus start to take effect. Consumers are seeing Burberry emerge leaner and more focused, with signs of recovery after a tumultuous year of restructuring and strategic overhaul.
Retail Revenue Dip Slows as New Strategy Takes Hold
Burberry reported £433 million ($584 million) in first quarter fiscal 2026 retail revenue, a 6% drop from last year. While still in negative territory, this marks a substantial improvement over Q1 2025, when sales plunged 22% as a leadership transition and shifting fashion trends took their toll.
Comparable store sales highlights by region:
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EMEIA (Europe, Middle East, India, Africa): +1% year-over-year, lifted by robust local spending but muted by fewer spending tourists.
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Americas: +4% year-over-year, boosted by new customer growth.
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China: -5%, with sales hit by lower tourist activity but offset by Gen Z and younger shopper gains.
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Asia-Pacific ex-China: -4%, with Japan’s challenges offset by resilience in South Korea.
Cost Cuts, Job Reductions, and Efficiency Push
Burberry said its cost-savings initiative remains on track to deliver £80 million in annualized benefits by FY26 as part of ongoing simplification, productivity, and cash flow improvements. The company’s earlier organizational shake-up—including up to 1,700 job cuts—was designed to promote greater collaboration, agility, and improved profitability.
Focus Sharpens on Core Heritage and Brand Desire
Change has come with a refined strategic direction. Under new CEO Joshua Schulman—who stepped in during last year’s crisis—Burberry launched its “Burberry Forward” plan to recommit to its brand’s roots, emphasizing key categories like outerwear and scarves after straying too far from its legacy.
Joshua Schulman, CEO of Burberry said: “Over the past year, we have moved from stabilising the business to driving Burberry Forward with confidence. The improvement in our first quarter comparable sales, strength in our core categories, and uptick in brand desirability gives us conviction in the path ahead.”
Schulman also acknowledged that while the turnaround is in its early stages and headwinds remain, these first signs are encouraging. The company remains focused on investments that boost brand desire, expecting momentum to build through the year.
Regional Dynamics and Consumer Trends
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EMEIA: Strength in local demand offset by weaker tourism.
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Americas: Gains driven by new, younger customers.
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Asia-Pacific: Japan lags, while South Korea stands out as a growth market.
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China: Tourism slowdown impacts neighboring regions, but Gen Z is providing a much-needed lift, with “investment dressing” shoppers likely to return later in the year.
Looking Ahead: Eyes On Sustainable Growth
Burberry’s full-year outlook stresses ongoing investment, targeting margin improvements through continued efficiency and productivity. The company is confident that these changes will lay the groundwork for a sustainable, profitable future—even as it acknowledges that the transformation is just beginning.
