Burberry returns to profit after turnaround

Burberry has returned to profitability, reporting pre-tax profits of £49 million for the year to 28 March 2026. This marks a reversal from losses of £66 million in the previous year and underscores the progress of the group’s turnaround programme.

For the fiscal year 2025-2026, adjusted operating profit rose sharply to £160 million, compared with £26 million a year earlier. The improvement reflects better sales performance, stronger margins and the impact of cost savings across the business.

Comparable sales grew 2% over the fiscal year, with momentum strengthening toward the end of the period. Same-store sales increased 5% in the final quarter, contributing to the company’s return to profit.

Growth in the Americas and China was particularly notable. In the quarter ended March 2026, comparable sales in these regions rose 10%, highlighting their importance to Burberry’s overall recovery and revenue mix.

Burberry’s gross margin reached 67.9%, an increase of 530 basis points at constant exchange rates. Management attributed the improvement to enhanced sales quality, indicating a healthier mix of full-price sales and product performance.

Cost discipline was a central element of the turnaround. The company delivered £100 million in annual cost reductions and achieved £80 million of these savings in the most recent financial year, supporting the rebound in operating profit.

E-commerce was another strong contributor to the recovery. Online sales grew by nearly 20%, helped by improvements to Burberry’s digital customer experience and website functionality during the year.

The enhanced online performance complemented store-based growth, with digital channels becoming a more significant part of the brand’s distribution as consumers increasingly engage with Burberry through its website.

Looking ahead to the 2026-2027 fiscal year, Burberry expects to reach new milestones as it continues to execute its turnaround strategy. The company remains focused on sustaining sales growth, protecting margins and leveraging both physical and digital channels.

At the same time, Burberry has stated it will remain mindful of geopolitical uncertainties that could weigh on consumer confidence. The group’s plans balance its growth ambitions with caution over potential external risks to demand.