Burberry Returns to Stronger Profitability
During the financial year ending on March 28, 2026, Burberry generated a turnover of £2.42 billion. Although the sales volume was constant relative to the last fiscal year, the company witnessed improved profitability, and it expects both increased sales and profit margins in 2027.
Adjusted operating profit surged from £26 million in 2025 to £160 million. Gross profit increased by 9%, and gross margin improved by 5.3%, driven by higher-quality sales following last year’s inventory reset. The adjusted operating margin rose from 1% to 6.6%, while reported operating profit shifted from a £3 million loss to a £115 million gain.
“Our Burberry Forward strategy is proving effective,” CEO Joshua Schulman stated during Thursday’s earnings call. Schulman, who launched the strategy a year and a half ago shortly after joining the brand, aims to rekindle brand appeal and enhance performance by reconnecting Burberry with its original purpose and target audience. Cost-saving measures are also part of the plan, with the company expecting an additional £20 million in savings in 2027, on top of the £80 million achieved this year.
Global Markets Show Renewed Momentum
Comparable store sales grew by 2% in 2026, with a return to growth beginning in Q2 and notable improvements in Greater China and the Americas, both up 10% in Q4. In EMEIA (Europe, Middle East, India, and Africa), sales were flat for the year, with a slight 2% decline in Q4 due to regional impacts from Middle East conflicts.
“We haven’t seen the war in the Middle East significantly affect regions outside of the Middle East itself, aside from some impact on travel in EMEIA,” Schulman explained, noting that the Middle East accounts for just 2% of Burberry’s total sales. CFO Kate Ferry highlighted robust momentum among American tourists visiting Europe.
The Americas and Greater China regions reported a sales increase of 4%. For China, which represents more than 30% of the total sales and is the most prominent market for Burberry, the growth was attributed to domestic spending. Burberry aims at furthering its reach in the region by increasing its marketing through documentaries made by Chinese National Geography that will feature local celebrities promoting seasonal outerwear as well as discovering the beautiful landscape and historical places within the region. Burberry is planning to organize a brand event in Shanghai during its 170th anniversary. The sales increase in the Asia-Pacific region, which includes markets such as Japan, South Korea, Southeast Asia, Australia, and New Zealand, was 2%.
Brand Reinvention and Future Growth Plans
Licensing revenue—covering fragrance, beauty, and eyewear—declined 9%, aligning with expectations. The company has been phasing out older fragrance lines as part of the Burberry Forward strategy. “Our licensing categories have longer lead times, but in 2027, we’re aligning our licensees more closely with the new brand expression,” Schulman explained.
In beauty, Burberry launched a campaign featuring musician Olivia Dean in a trench coat against a London backdrop. In eyewear, the brand has shifted from a niche aesthetic to a more recognizable and desirable style aligned with its fashion identity.
Despite cautious outlooks on the macroeconomic environment, Schulman expressed optimism about Burberry’s growth prospects. “Over the past year, we’ve made significant strides guided by our Burberry Forward strategy. We see positive impacts on our business and financial performance,” he told investors. “Looking ahead, our focus is on delivering sustainable, profitable growth through disciplined operations, reinvesting savings to fuel expansion. We’re just getting started.”
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Scarlett Hayes analyzes fashion business trends, brand strategy, and global retail insights shaping the industry’s future.
