Burberry shares jump on turnaround hopes

Burberry shares jumped more than eight per cent in early trades this morning as investors seemed heartened by the group’s second-half picture.

While the luxury fashion group reported an operating loss for its latest financial year, its first in over a decade, momentum in the second half of the company’s year offset some of the losses.

The FTSE 250 firm announced a reported operating loss of £3m in the 52 weeks ended March 2025. It reported an adjusted operating profit of £26m.

Sales fell 20 per cent in the first half of the year but improved to a five per cent contraction in the second half. Overall, sales fell 12 per cent year over year.

This is down from a profit of £418m in its last financial year and £634m in the prior year.

Still, Burberry reported an operating profit in the second half of the year.

Burberry Forward starts to yield results

Despite the financial slump, Burberry said it has seen “significant progress” with its turnaround plan, Burberry Forward, launched last November.

The brand has launched new marketing campaigns over the past year, enlisting the likes of actors Olivia Colman and Barry Keoghan, helping drive demand for its bestselling outerwear products.

However, the company also announced it could cut around 1,700 roles worldwide over the next two years as part of plans to reduce costs.

However, sales in Asia – a key market for Burberry – remained low, with a drop of nine per cent in the second half and 25 per cent in the first half.

Sales have seen a notable slowdown in the last two years due to an economic downturn and a trend to ‘quiet luxury’.

America was the only region to show sales growth in the second half of the year, with a one per cent rise. Sales in the region fell 21 per cent in the first half.

“There was a glimmer of hope in improving fourth-quarter sales, even if they are still under water,” Robinhood UK lead analyst Dan Lane said

“The market really got behind Burberry when turnaround news struck but it’s been a tougher sell since.

“The brand needs to snatch back its own destiny soon if it’s going to be able to build a consistent brand image now,” he added.

Richard Hunter, head of markets at interactive investor said: “Without question, there is some momentum building.”

Hunter added: “Burberry will want to consign the past year to the history books as soon as possible, when the change of chief executive, suspension of the dividend and first-half loss sent the shares into a tailspin. The group responded immediately and decisively, but the new strategy will take time to filter through.”