Burberry's Q1 comparable sales dip but brand desirability increases

Burberry Group PLC today released its first-quarter trading update for the 13 weeks ended June 28, 2025, indicating an improvement in comparable sales and growing brand desirability as it progresses with its transformation strategy.

For Q1 FY26, Burberry reported retail revenue of 433 million pounds, a 6 percent decrease at reported exchange rates and a 2 percent decline at constant exchange rates compared to 458 million pounds in the first quarter of FY25. Comparable store sales saw a 1 percent decline, with space contributing a 1 percent headwind.

Joshua Schulman, chief executive officer, commented on the results, stating, "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. Our Autumn 2025 collection is being well received by a broad range of luxury customers as it arrives in stores. Although the external environment remains challenging and we are still in the early stages of our transformation, we are encouraged by the initial progress we are starting to see."

Burberry comparable sales improve across core regions

Despite the above negative figures, comparable retail sales improved sequentially across all regions relative to the previous quarter. EMEIA grew by 1 percent, supported by local spending, while the Americas saw a 4 percent increase, boosted by new customer growth. Greater China experienced a 5 percent decrease, with Mainland China down 4 percent. Asia Pacific declined by 4 percent, marked by challenging performance in Japan, partially offset by growth in South Korea.

The company implemented several actions in the first quarter to drive its "Burberry Forward" initiative. These included amplifying its "Timeless British Luxury" brand expression through distinctive monthly campaigns, rebalancing the autumn 2025 collection to attract a broad range of luxury customers with a focus on core brand codes, and enhancing visual merchandising in stores with fixtures to improve product densities. The company stated that its scarf bar pilot program is exceeding expectations, with plans to roll it out to 200 stores by the end of the year.

Online momentum continued for the third consecutive quarter, attributed to a stronger product mix, universal styling, and storytelling. Organisational changes were also implemented to foster greater collaboration and agility, and the cost efficiency program remains on track to deliver 80 million pounds in annualised savings by FY26.

Burberry to focus on further improving brand desirability

Looking ahead to FY26, Burberry acknowledges that it is still in the early stages of its turnaround and that the macroeconomic environment remains uncertain. The company's primary focus for the year is to build on the initial progress made in reigniting brand desire, which is considered a key requisite for top-line growth.

In the first half of the fiscal year, Burberry will continue to prioritise investment, anticipating that the impact of its initiatives will build as the year progresses. The company aims to deliver margin improvement through a continued focus on simplification, productivity, and cash flow, reiterating its confidence in positioning the business for a return to sustainable, profitable growth.