Burberry has returned to profitability, reporting a pre-tax profit of £49 million for the year ending March, reversing a £66 million loss from the previous year. However, the British luxury brand cautioned that the ongoing conflict in the Middle East poses risks to its recovery efforts. Comparable sales grew 2% year-over-year, driven by strong performance in the Americas and China, where sales surged 10% in the last quarter. Full-year revenue reached £2.4 billion, in line with expectations.
CEO Joshua Schulman described the fiscal year as a "meaningful inflection point" for the company, highlighting progress in attracting younger consumers. The brand has also leveraged celebrity endorsements, including collaborations with actors like Simone Ashley and appearances at high-profile events like the Met Gala. Despite these gains, sales in Europe, the Middle East, and Africa (EMEA) declined 2% due to reduced tourism and the impact of the Middle East conflict.
Analysts noted mixed reactions to the results. While some praised Burberry's cost-saving measures and turnaround strategy, others expressed concerns about the broader economic and geopolitical risks. The luxury sector has faced challenges, with peers like LVMH, Kering, and Hermès also reporting subdued sales in the region. Schulman emphasized the company's resilience but acknowledged the uncertain macroeconomic environment.
Looking ahead, Burberry remains optimistic about its long-term prospects, citing opportunities for further growth. The company expects to make progress toward its financial ambitions by 2027, despite the headwinds.