Burberry’s revenue declined 3% to £1.03 billion in the first half of 2026, ended September 27, 2025. However, its comparable retail sales returned to growth in Q2, for the first time in two years, up 2% — a slight improvement on last quarter’s 1% decline.
“One year into Burberry Forward, my belief in this extraordinary British luxury house is stronger than ever,” CEO Joshua Schulman said at Thursday’s earnings presentation, hosted at the brand’s London HQ. “We have moved from stabilizing the business to returning to growth. I am encouraged by the signals I am seeing throughout the business, which provide initial proof points that our Burberry Forward strategy is working with our timeless British luxury expression and an improved product offering. Our brand has become more desirable; we’re attracting new customers while welcoming back existing ones, resulting in sequential improvement in customer growth.”
Burberry Forward is centered on four pillars: extend the timeless British luxury brand expression across all touchpoints; improve merchandising by leading with outerwear; align the retail and e-commerce distribution with the product and customer strategy; and reignite a high-performance culture internally.
The British brand marks its 170th anniversary next year. In fiscal 2026, Burberry does not expect any changes to its guidance of retail sales remaining flat. It does expect, however, to deliver annualised savings of £80 million, £24 million of which was delivered in fiscal 2025.
Much of Burberry’s initial turnaround has been led by marketing, in which the brand continues to invest its cost savings. “We’re very focused on having an ROI [through marketing], and we’re pleased that the initiatives we’ve had have resonated,” said Schulman. “We are seeing a direct impact from marketing into sales. A year ago, we didn’t have the luxury to even consider [increasing marketing beyond a high-single-digit percentage of sales] given where the P&L was, and now we want to be very mindful of those opportunities.”
Adjusted operating profit reached £19 million, compared to a loss of £41 million in the first half of 2025. Gross margin in H1 rose to 67.9%, up from 63.4% in 2024, as a result of the inventory actions taken last year. Inventory was down 24% compared to H1 2024. Schulman noted a reduction in leather goods inventory, in particular, in order to test and refresh the assortment.
“The strength in the newness that we were delivering in our full-price channel fully offset the declines we were having in the outlet channel. Traffic has been challenging in that channel, but we have less inventory going through there now and we’re discounting less, so all of that is good for brand health and heat,” the CEO added.
Burberry is introducing lighter gabardine to improve the seasonality of its iconic trench coats, allowing them to be worn in global markets. Along with that, it has launched 100 Scarf Bars — a merchandising strategy to improve the visibility of scarves in-store — and is on track to deliver 200 by the end of the year.
Following the strengthening of its outerwear, Burberry is moving onto improving its ready-to-wear offering — knitwear, trousers, skirts — all while resetting the base price of handbags (which Schulman acknowledged had been too high). “Looking forward, we are strengthening our assortment of leather boots and shoes, with a focus on both subtle and overt branding driving commercial shapes with clear brand signifiers,” said Schulman.
Wholesale revenue — which accounts for 13% of total sales — declined 11% in H1, slightly better than guidance, thanks to a strong performance from strategic partners across luxury multi-brand retailers, US department stores and travel retail. “Wholesale serves several very important purposes. Our opinion-leading digital wholesale customers are the ideal place for customers to discover the evolution of Burberry alongside our luxury peers,” said Schulman. “We’ve seen growth in our wholesale order book from these opinion-leading wholesale customers globally who are enthusiastic about the new direct direction of Burberry.”
EMEIA (Europe, the Middle East, India and Africa) comparable store sales rose 1% in H1 (up 1% in both Q1 and Q2). Sales in the Americas grew 3% in the first half of the year (up 4% in Q1 and 3% in Q2). “The US was the first region to return to growth, and what we’ve seen is that the brand expression and the way that we’re showing up at retail in exciting ways is really resonating with the customer there. Our team in the US has been very creative — in a market where retail traffic is so-so — about how they’re going to the customer,” said Schulman, noting a VIC event in the Hamptons over the summer and a similar activation in Aspen planned for the winter.
Greater China led with the strongest improvement, with 3% comparable retail sales growth in Q2, an improvement on last quarter’s 5% decline. Asia-Pacific sales declined 2% in H1, improving from -4% in Q1 to 0% in Q2.
Burberry is seeing new customer growth among Gen Z, especially in China. “I was just in China a few weeks ago and walking through the stores with our teams there, and they were sharing how the evolution in our collection architecture is attracting different customer profiles to the brand,” said Schulman. “I think in the past, there may have been an idea that in order to attract younger customers in China, you need to be super edgy and do what other brands are doing. But actually, what’s working in China now is authenticity — we’re seeing that across all of our customer archetypes.”
At the same time, Burberry is investing in AI-enabled clienteling tools to “support our client advisors and serve our customers with a warm and personal approach informed by data”, said Schulman.
Looking ahead, the company is confident about the potential of the Burberry Forward strategy. “I am more confident than I was 12 months ago. Then, this was a thesis — that we were too niche, we were trying to be [like] other brand strategies and that we weren’t true to our own DNA,” said Schulman. “As we’ve leaned into that [DNA], it’s resonating with the customers we want to have. Long term, I see this as a bigger opportunity than I envisioned a year ago.”
