Burberry has beaten market forecasts – yet is still cutting 1,700 jobs. The luxury British brand’s financial results, released on Wednesday, invite a double reading. For the financial year ending March, revenues fell by 15% at current exchange rates (–17% at constant rates), down to GBP 2.461 billion, with the company posting a loss compared to the previous year’s performance. However, some figures exceeded analysts’ expectations, as the second half of the year showed a marked improvement.
Burberry beats the estimates
Some results came in slightly above forecasts: comparable retail sales declined by 6%, compared to a –7% consensus. Adjusted EBIT came in at GBP 26 million – comprising a GBP 41 million loss in the first half and a GBP 67 million profit in the second. While still a sharp drop from last year’s GBP 418 million, it was better than the expected GBP 11 million. “We expect the market to take these results as an encouraging sign. But the new Burberry has yet to emerge”, reads a Bernstein report. In fact, shares were up 8% at the time of writing. “Burberry has outperformed most luxury peers this season”, confirms Thomas Chauvet of Citi, who recently upgraded Burberry to a “buy” for the first time in 17 years.
But it’s still cutting 1,700 jobs
Burberry’s retail sales for the 2024–2025 financial year (April to March) declined by 12%: –20% in the first half, improving to –5% in the second. The year ended with a loss per share of 14.8p, compared with earnings of 73.9p per share the previous year. However, the second-half recovery suggests that the strategy of new CEO Joshua Schulman may be bearing fruit. Citi notes that improved profitability was achieved “through strict cost control”. That discipline will continue, with the group announcing plans to cut around 1,700 jobs over the next two years. Most of the redundancies will affect office staff, though the night shift at the Castleford manufacturing site will also be gradually phased out, reports Business of Fashion. Schulman stated he feels “more optimistic than ever” that Burberry’s best days are yet to come.
Photo: Burberry
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