Burberry Shares Surge After Beating Profit Expectations

Strong Q4 results boost investor confidence, but 1,700 global jobs could be cut as part of cost-saving plan

Burberry Beats Expectations Despite Challenging Year

Luxury fashion brand Burberry saw its shares rise over 7% in London on Wednesday after posting better-than-expected earnings for the year ending 29 March 2025.

Despite facing a difficult retail environment, the British label reported an adjusted operating profit of £26 million, surpassing forecasts of £11 million. While this marks a sharp drop from last year’s £418 million, the result signals progress under CEO Joshua Schulman’s turnaround plan, Burberry Forward.

Q4 Performance Offers Glimmers of Momentum

In the fourth quarter, comparable store sales declined by 6%, slightly outperforming analyst expectations of a 7% fall. Although gross margins slipped to 62.4% due to inventory clearance, this aligned closely with market estimates.

Schulman said:

“After a challenging first half, we moved quickly to reignite brand desire and improve performance. While we’re still in the early stages, I’m confident Burberry’s best days lie ahead.”

Cost-Cutting Plan to Impact 1,700 Jobs Globally

As part of its ongoing cost-saving initiative, Burberry has doubled its FY26 savings target to £80 million, up from the previously planned £40 million. The brand achieved £24 million in savings during FY25, in line with expectations.

To meet the revised target, restructuring charges are now forecast at £50 million, more than double the original estimate. The company confirmed that up to 1,700 roles could be affected globally over the course of the programme, pending consultations.

Savings will come from reduced operating expenses, more efficient procurement and real estate strategies, and streamlining personnel costs.

Outlook Cautious Amid Economic Uncertainty

Burberry has opted for limited forward guidance, citing ongoing global uncertainty. It forecasts:

• A mid-teens percentage drop in wholesale revenues for the first half of FY26
• Flat contribution from retail space over the full year
• Capital expenditure of approximately £130 million

While analysts at RBC Capital Markets described the results as a “positive first step,” they also noted that the company’s strategy needs time to translate into sustained growth.

Early Signs of a Turnaround, But Challenges Remain

Burberry’s better-than-expected performance in Q4 and full-year profit beat has provided a boost to investor sentiment. CEO Joshua Schulman’s turnaround strategy is showing early promise, and cost-saving measures are being accelerated.

However, significant challenges remain. The brand must navigate a difficult global retail climate and deliver sustainable growth without compromising its luxury positioning. The planned job cuts also highlight the delicate balance between efficiency and workforce impact.

If Burberry can maintain this momentum and build brand desirability, its long-term outlook could be brighter—but the road to recovery will require discipline and strategic focus.

Sources: (Investing.com, Reuters)