Burberry Reports 5% Revenue Fall, Margin Improvements in First Half

Burberry regains traction in the first half of its 2026 financial year. The British luxury company reported a turnover of 1.032 billion pounds ($1.35 billion), a reported decline of 5% and 3% lower at constant rates. The performance shows a significant moderation compared to the 20% drop recorded a year earlier.

Like-for-like sales were stable in the first nine months (period ending September), after a 1% decline in the first quarter and a 2% increase in the second quarter, the first positive growth in two years. The retail channel generated 854 million pounds ($1.21 billion), down 3% on the previous year.

Adjusted operating profit was 19 million pounds ($24.9 million), compared with a loss of £41 million in the same period of 2024. The adjusted operating margin was 1.9%, compared with a decline of 3.8% in the previous year. Reported operating income was negative 18 million pounds ($23.6 million), weighed down by a restructuring charge of 37 pounds million linked to the Burberry Forward plan.

By region, Burberry reported an improvement across the board. Emea grew 1% in the first half, with local customer strength offsetting lower tourism activity. In the Americas, sales advanced 3%, driven by new customer acquisition. China reduced its decline to 1%, after returning to growth in the second quarter, with an increase of 3%, while Asia-Pacific fell by 2%, with a better performance in Japan from the summer onwards.

Burberry, however, increased its turnover by 2% in the second quarter of the year

In terms of product, outerwear led growth in all regions, while softs posted double-digit gains. The leather goods business improved sequentially, although it remained weak. Finally, the wholesale channel declined by 11% at constant exchange rates, in line with the strategy of reducing the perimeter and prioritizing strategic partners.

Gross margin reached 67.9%, an improvement of 450 basis points over the same period last year, supported by tighter inventory management and the normalization of the adjustments applied in 2024. Adjusted operating expenses were down 7% at reported rates, in line with the savings program that forecasts 80 million pounds in efficiencies by year-end.

Free cash flow was also negative by 50 million pounds ($65.6 million), although this was a significant improvement on the deficit of 184 million pounds in the previous year. Net debt stood at 93 million pounds sterling ($122 million) before leases.

A year after driving its Burberry Forward strategy, CEO Joshua Schulman highlighted the first tangible results of the repositioning. “With the consistency of our expression of timeless British luxury and an enhanced product offering, we have begun to see customers returning to the brand,“ the executive said.

The company maintains a cautious outlook for the remainder of the year, while expecting the impact of its initiatives to gain traction in the coming months. The company has assured that it will continue to focus on improving margins and productivity and reinforcing its identity as a contemporary British luxury house.