Burberry shows first signs of stabilisation as Schulman’s turnaround gains momentum

Burberry Group plc has cause for measured optimism after its interim results confirmed that a long-decline in comparable store sales has finally come to a halt. According to Robyn Duffy, senior analyst (Consumer Markets) at RSM UK, the results should bring “a sigh of relief” for the luxury brand. Flat store sales in the first half (versus a steep 20 percent drop last year) represent “clear progress,” and the second quarter delivered the company’s first positive comparable store sales growth in nearly two years.

On the profitability front, Burberry posted an adjusted operating profit of 19 million pounds for the half-year ended 27 September, versus an operating loss of 41 million pounds in the same period last year. Duffy notes that this “highlights the impact of tighter cost control and improved inventory management.”

The turnaround is being orchestrated under the leadership of Joshua Schulman, who replaced Jonathan Akeroyd as CEO in July 2024. According to Duffy, Schulman’s “Burberry Forward” strategy is gaining traction. She credits his efforts to better align design and commercial teams, strengthen the go-to-market strategy and reconnect the brand with core customers. The renewed emphasis on heritage categories, such as outerwear and scarves, has supported top-line growth and refocused Burberry on its roots.

That said, the luxury environment remains uneven. Duffy observes that ultra-luxury houses such as Hermès and flagship brands within LVMH continue to show resilience, while aspirational luxury brands face pressure on volumes and margins. Burberry, positioned between those tiers, “has opportunity, but also exposure, making flawless execution critical.”

Risks remain

Demand in China is still soft, and uncertainty around U.S. tariffs persists. On the positive side, Burberry’s European manufacturing base offers some protection from global supply-chain and manufacturing volatility. Duffy says the key question now is whether the Q2 momentum can carry through the crucial festive trading period and into FY27.