Burberry posts sharp revenue decline, launches turnaround plan

Burberry’s first half revenue of 1,086 million pounds declined by 20 percent CER, and 22 percent reported. Retail comparable store sales declined by 20 percent in the first half and the second quarter. Wholesale sales for the period were down 29 percent CER and 30 percent reported.

Today, Burberry announced 'Burberry Forward', a strategic plan to reignite brand desire, improve the company’s performance and drive long-term value creation.

"Burberry's original purpose to design clothing that protects people from the weather is more relevant than ever. Our recent underperformance has stemmed from several factors, including inconsistent brand execution and a lack of focus on our core outerwear category and our core customer segments,” said Joshua Schulman, Burberry’s chief executive officer in a statement.

“Today, we are acting with urgency to course correct, stabilise the business and position Burberry for a return to sustainable, profitable growth," he added.

Burberry reports operating loss

Licensing revenue for the period grew 5 percent at CER and 3 percent driven by the continued strong performance in fragrance.

Burberry’s adjusted operating loss reached 41 million pounds, adjusted gross margin was 63.4 percent, down 640 bps at CER and reported, while adjusted operating margin declined 3.4 percent CER and 3.8 percent reported.

Adjusted diluted EPS reduced to negative 18.3p and diluted EPS to negative 20.8p. The company reported an operating loss of 53 million pounds and operating margin of negative 4.9 percent reported.

Commenting on the outlook, the company said: “In the short term, with our all-important festive trading period ahead and an uncertain macroeconomic environment, it is too early to determine whether our second-half results will fully offset the first-half adjusted operating loss.”

Burberry’s performance across markets

Burberry’s revenues in Asia Pacific declined 25 percent and 28 percent in the second quarter with comparable sales in Mainland China down 24 percent in the first half and 27 percent in the second quarter.

South Korea declined 26 percent in H1 and 26 percent in the second quarter, while Japan fell 2 percent in the first six months and 9 percent in the second quarter. South Asia Pacific declined 38 percent in the first half and 37 percent in the second quarter.

The company’s revenue in EMEIA fell 13 percent in the first half period and 10 percent in the second quarter. Americas declined 21 percent in H1 with Q2 down 18 percent.

By product, outerwear and softs continued to perform better than the average in all key regions. The company said ready-to-wear performed in line with the group average in the first half with an improving trend from first to second quarter for both men's and women's, while leather goods and shoes underperformed the group.

Burberry opened 19 stores in the half and closed 12, with 429 directly operated stores at September 28, 2024.