Image source: © 2025 Krish Capital Pty. Ltd.

Highlights:

  • BRBY eported a 1% decline in comparable store sales in Q1FY26.
  • EMEIA and Americas recorded growth, but Asia Pacific and China saw declines.
  • Autumn 2025 collection launch, brand campaigns, and cost programme shaped quarterly activity.

Burberry Group plc (LSE: BRBY), the British luxury fashion house known for its heritage outerwear and iconic check patterns, reported a 1% year-on-year decline in comparable store sales for the first quarter of the financial year 2026 (Q1FY26). Total retail revenue for the quarter was GBP 433 million, reflecting a 6% decrease at reported exchange rates. The result was impacted by a 4% currency headwind and a 1% space reduction, equating to a 2% decline at constant currency levels.

Despite the headline sales decline, Burberry noted sequential improvements in comparable retail sales across all regions versus the prior quarter, driven by actions taken under its “Burberry Forward” strategic plan. CEO Joshua Schulman remarked that while macroeconomic conditions remain difficult, the company is encouraged by the initial progress of its transformation, including improving brand relevance, a rebalanced product offering, and early customer response to the Autumn 2025 collection.

In Q1FY26, EMEIA (Europe, Middle East, India and Africa) delivered a 1% increase in comparable sales. Growth in local customer spending helped to offset reduced tourist demand. The Americas saw a 4% rise, supported by new customer acquisition. However, performance in Asia Pacific reported a 4% decline. Japan continued to face pressure, although this was partly offset by growth in South Korea. Greater China recorded a 5% fall in comparable sales, with mainland China down 4% year-on-year.

To reposition the brand and support its turnaround strategy, Burberry introduced several brand and operational initiatives during the quarter:

  • Campaigns: A series of themed monthly campaigns High Summer, Highgrove, and Festival were launched to communicate the brand’s positioning within the "Timeless British Luxury" space, targeting distinct consumer segments and aligning with UK seasonal themes.
  • Product Rebalancing: The Autumn 2025 collection, described as the company’s first full collection under the “Burberry Forward” strategy, focused on simplification by centring around a smaller number of key styles. It aimed to feature recognisable Burberry design codes and appeal to a wider range of luxury consumers.
  • Retail Store Enhancements: New visual merchandising elements, including a pilot scarf bar concept, were rolled out. The pilot locations have outperformed the rest of the store fleet, and the company aims to expand the initiative to 200 stores by year-end.
  • Online Momentum: Digital channels saw continued sales momentum for the third consecutive quarter. This was attributed to improvements in product mix, styling, and online content presentation.
  • Organisational Changes: Internally, the company implemented structural changes aimed at increasing agility and collaboration. A cost efficiency programme remains on track to deliver £80 million in annualised savings by the end of FY26.

Burberry reiterated that the turnaround remains in its early phase and warned that the external environment continues to present challenges. Management expects to maintain investment levels in the first half of the year to support brand repositioning efforts, with results from these initiatives anticipated to build gradually. The company also plans to improve margins through a continued focus on operational simplification, productivity improvements, and disciplined cash flow management. Longer term, it expects these efforts to support a return to “sustainable, profitable growth.”

BRBY is trading at 0.80% lower at GBX 1,238.00 per share as on 18 July 2025.