Burberry reported a 1% decline in first-quarter retail sales, beating expectations and indicating early signs of recovery for the struggling British luxury brand. Since September, Burberry's stock price has more than doubled, and it rose by 5% in London trading. Known for its trench coats and checkered scarves, the brand is leveraging traditional British design elements under CEO Josh Schulman, who took over a year ago, to regain consumer interest.
The company noted that comparable sales in Europe have returned to growth, and business in the Americas is improving. Sales in China and other Asian regions are still declining but at half the rate of the previous quarter. Schulman expressed confidence in the brand's future, citing improved comparable sales, strong performance in core categories, and increased brand appeal.
Burberry has issued several profit warnings in recent years. Under Schulman, the company plans to cut one-fifth of its global workforce as part of a transformation strategy, a move welcomed by investors. For the quarter ending June 28, Burberry's overall comparable retail sales fell by 1%, better than the expected 3% decline and an improvement from the previous quarter's 6% drop.
Citigroup analysts noted that since Schulman introduced a new strategy last November, the brand has seen three consecutive quarters of improved same-store performance, suggesting that comparable sales could turn positive this quarter. They believe Burberry's performance may be more robust compared to peers amid increased macroeconomic and geopolitical pressures, and weak tourism spending in Europe and Japan.
