Burberry shares pop 8% as British heritage pivot lures back U.S. shoppers
Burberry sales in the Americas rose 4% year-on-year in the three months to June 28, the company said Friday in its fiscal first-quarter results.
Shares of Burberry were up 8.13% by 11:26 a.m. London time (6:26 a.m. E.T.).
The luxury brand, known for its trench coats, attributed the uptick to both new and existing consumers, following a 4% decline in the region in the fourth-quarter and a 9% fall in Burberry's full 2025 fiscal year.
CEO Joshua Schulman said the growth indicated the "diversity of the luxury consumer that exists in that market," from elite, high-spenders to high-traffic mall shoppers. The U.S. accounts for 19% of Burberry's business.
Nevertheless, Schulman said that Burberry's efforts to position itself as a "luxury brand with broad universal appeal" was showing green shoots in other regions, too.
Burberry's overall group revenues declined 1% year-on-year on a comparable basis to £433 million ($ 582million) in the June quarter, compared with the 3% decline analysts had forecast in a company compiled consensus.
Sales rose 1% in Europe, the Middle East, India, and Africa (EMEIA) in the June quarter, while declining 5% in the Greater China region and by 4% in Asia Pacific, which the company said was "driven by Japan following a slowdown in tourism."
All regions nevertheless demonstrated notable improvements from significant declines in prior quarters.
"What we saw in the Americas, we also saw in the other regions as well. Our local customer has been strong globally and we have seen a sequential improvement in all regions," Schulman told a media call on Friday.
The results fall against a troubling backdrop for the luxury sector, as U.S. tariffs loom large, threatening to undermine an anticipated revival in U.S. consumer spending, even as the Chinese market continues to lag.
Burberry's Chief Financial Officer Kate Ferry acknowledged the tariffs as a "headwind," but said that the company had spent the previous year adapting its supply chains and adjusting pricing where appropriate.
"We actually took a very surgical approach to pricing in the U.S. and understood where we had price elasticity," she said on the Friday earnings call.
It comes amid a sweeping overhaul of the 169-year-old heritage luxury fashion house. On Friday, it that said a previously announced cost savings program, including 1,700 job cuts announced in May, would results in £80 million in annualized savings by the end of the 2026 financial year.
July marks the first anniversary at the helm for Schulman, who joined from Michael Kors and in November announced urgent plans to "course correct" after a prolonged period of the company's share price underperformance, waning sales and a slew of management changes.
UBS analysts said in a note Friday that the results provided confidence that Burberry's brand momentum was "accelerating."
"Josh got in at the eleventh hour to try and steer the Spring/Summer product in the right direction with this focus on Britishness and on iconic Burberry products, the check pattern, more realistic pricing," Luca Solca, sector head for global luxury goods at Bernstein, sector told CNBC's "Squawk Box Europe" on Friday.
"The fact that organic growth is improving, while being still negative, I think is a sign that the new marketing vision works. We expect even more good news in the second half when the full winter product is going to fully represent the new marketing approach and that means a lot to investors, clearly."
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