Burberry’s Forward Momentum: A Turning Point in Brand Relevance
The inflection is real
Burberry’s preliminary FY26 results mark a clear departure from the struggles of recent years. In his opening remarks, CEO Joshua Schulman declared:
“We have returned to positive comparable sales with sequential momentum throughout the year and particular strength in Greater China and the Americas, both of which delivered double-digit comp growth in Q4.” — Joshua Schulman, Chief Executive Officer · 2026-05-19That momentum is not just a top-line story. CFO Kate Ferry laid out the underlying quality:
“gross margin expanded 530 basis points to 67.9%, adjusted operating profit improved to GBP 160 million, and we’ve reduced net debt to adjusted EBITDA to 1.6x from 2.3x.” — Catherine Ferry, Chief Financial Officer · 2026-05-19The turnaround is firmly anchored in the brand codes that Burberry has spent the past two fiscal years reanimating—from the trench coat to the scarf. The product strategy is broadening, too. Schulman noted that the momentum is extending beyond heritage categories:
“You will see in our stores this autumn/winter, you'll see a much expanded assortment of cashmere that – and the reason why we're expanding it is because what we had in store this year literally sold out.” — Joshua Schulman, Chief Executive Officer · 2026-05-19That demand stems from a deliberate effort to recruit a new generation. Echoing his prior commentary on Gen Z customer acquisition, Schulman highlighted the strong double-digit growth in China and the Americas, driven by both local spend and tourism recovery.
Importantly, the company is not just leaning on the same playbook. The emphasis on client advisers and personalization is new and data-driven, aimed at converting first-time buyers into loyal clients.
The engine of the turnaround
The strategic narrative is consistent with what the market has come to expect, but the numbers now validate it. The gross margin expansion is a direct result of the inventory reset executed in FY25 and the shift toward full-price selling. As Ferry explained, the company guided to a 300–350bps improvement and delivered 530bps, reflecting higher sell-throughs and lower markdowns.
Where Burberry is now winning is the same two markets that had been the source of its pain: Greater China and the Americas. The company’s iconic Burberry trench resonates with customers, and the recent portraits campaign drove triple-digit engagement increases. In China, the brand’s cultural relevance is being amplified through partnerships like Chinese National Geography, and the company is seeing double-digit growth in Gen Z customers.
The comparison to previous quarters is stark. In the 2025-11 call, Schulman was already noting that "our earned reach was up 129% in China, which translated into new customer growth of 10% in China."
“We really saw customer engagement globally improve as we went through the quarter but particularly in China. Our earned reach was up 129% in China, which translated into new customer growth of 10% in China.” — Joshua Schulman, Chief Executive Officer · 2025-11-14That early support is now maturing into sustained comps. The company’s emphasis on “all kinds of weather” has always been a brand angle, but it has now become a commercial reality.
Burberry is really for all kinds of weather.
The product architecture is becoming more coherent, with good-better-best pricing across categories. The broader assortment is driving higher conversion rates, and the company is turning toward more targeted investments in stores, such as the scarf bars and trench destinations.
Financial discipline and the path to GBP 3 billion
Despite increased marketing spend, Burberry has kept costs under control. The cost savings program has delivered GBP 80 million of the GBP 100 million target, and the company guided to a flat retail space in FY27 while expecting mid-single-digit wholesale growth.
The balance sheet is stronger, with leverage down to 1.6x. Ferry reaffirmed the intention to reinstate the dividend when appropriate, though near-term priorities are investment in the strategy and maintaining optionality. The company is also guiding to gradual margin improvement back to the 70% gross margin target.
Schulman’s conviction is clear: “We’re just getting started.” The opportunity set—from leather goods to cashmere—provides multiple levers beyond the heritage categories. With the brand now resonating across geographies and generations, Burberry’s forward trajectory looks well-supported.