Burberry has returned to growth after three years of stagnation, though ongoing conflict in the Middle East continues to dampen sales across Europe.
The British luxury brand reported a 5% rise in comparable sales to £455 million for the 13 weeks ending June 27. This marked its first quarterly growth across all divisions—womenswear, menswear, accessories, and childrenswear—since 2023. Joshua Schulman, who became chief executive two years ago, stated the results proved the company’s turnaround strategy was effective.
Sales rebound in China and the Americas
Strong performance in key markets drove the recovery. Sales in China increased 9%, largely due to younger shoppers. In the Americas, revenue rose 12%, supported by a campaign celebrating the brand’s 170th anniversary.
The initiative, The Trench Portraits of an Icon, featured actor Jonathan Bailey, model Kate Moss, and footballer Eberechi Eze. It led to a 19% rise in new customers for Burberry’s rainwear, while demand for scarves and trench coats stayed steady. Women’s handbags also saw renewed interest.
Middle East conflict weighs on European tourism
Burberry’s Europe, Middle East, and Africa division experienced a 3% drop in sales. The decline stemmed from reduced tourist spending in cities like Paris and lower foot traffic in luxury destinations such as Dubai, both affected by the ongoing conflict.
The company acknowledged the war’s impact on consumer confidence in its outlook. Shares fell nearly 4% in early trading, reflecting investor doubts about whether the recovery would last.
Related: Learner drivers spend nearly ÂŁ1,000 on tests
Richard Hunter, head of markets at Interactive Investor, said the results showed progress but noted skepticism remained. Continued growth, he added, could shift market sentiment from caution to optimism.
Schulman faces shareholder pressure over executive pay. At the annual general meeting earlier this week, 35% of investors rejected a ÂŁ12.2 million bonus awarded to him, highlighting frustration with compensation policies.
The focus under Schulman has been on reinforcing Burberry’s identity as a provider of classic British luxury. The recent campaign and product lines suggest the approach is working, though geopolitical instability remains a hurdle.
Luxury brands depend heavily on tourism, especially from high-spending Middle Eastern and Asian travelers. The conflict’s effect on European sales reflects wider industry trends, with brands like LVMH and Kering also reporting weaker demand in the region. Burberry’s gains in China and the US, however, offer some protection for now.
The coming quarters will determine if the momentum holds or if external pressures force another strategic shift.
Analysts point out that while the rebound is encouraging, the luxury sector’s reliance on global stability leaves it vulnerable to disruptions.
