Burberry's revenues for the 2026 fiscal year, which ended on March 28, reached £2.42 billion. While revenue growth remained flat year-on-year, the company reported a substantial improvement in profitability and anticipates both revenue growth and margin expansion in 2027.
Profitability Gains
Adjusted operating profit saw a marked increase from £26 million in 2025 to £160 million in 2026. Gross profit rose by 9%, and the gross margin increased by 5.3%, attributed to higher quality sales following last year’s inventory reset. The adjusted operating margin moved up from 1% in the previous year to 6.6% in 2026. Reported operating profit shifted from a £3 million loss to a £115 million profit.
"This is evidence that our Burberry Forward strategy is working," stated Burberry CEO Joshua Schulman during Thursday’s earnings call. Schulman launched the strategy a year and a half ago, following his appointment as CEO.
The strategy focuses on reigniting brand desire and improving performance by reconnecting Burberry with its core audience and purpose. Cost savings also play a significant role, with an expected additional £20 million in 2027 on top of the £80 million saved this year.
Regional Performance
Comparable store sales rose by 2% in 2026, showing positive trends from Q2 onwards, with notable gains in Greater China and the Americas, both up 10% in Q4. However, sales in EMEIA (Europe, the Middle East, India, and Africa) remained flat, with a 2% decline in Q4 due to regional conflict in the Middle East.
“We have not seen the impact of the war in the Middle East beyond the Middle East [region] itself, and some impact on travel in EMEIA. It’s been quite localized,” Schulman noted, mentioning that the Middle East contributes 2% of Burberry's total sales. CFO Kate Ferry emphasized strong momentum from American tourists visiting Europe.
Market Expansion
Sales in the Americas and Greater China increased by 4% in each region. In China, Burberry's largest market representing over 30% of sales, growth was driven by local spending. The brand is enhancing its marketing efforts in the region with a series of documentary films produced in collaboration with Chinese National Geography, showcasing local talent in Burberry apparel. A major brand event in Shanghai is planned later this year to celebrate Burberry's 170th anniversary.
In Asia-Pacific, sales rose by 2%, with outerwear and scarves showing double-digit growth in the second half of the year. The introduction of 200 scarf bars across stores in 2026 is part of the brand's strategy to boost this category.
Licensing and Leadership Changes
Licensing sales, which include fragrance, beauty, and eyewear, fell by 9%, aligning with company expectations as part of the Burberry Forward strategy. Schulman expressed optimism about aligning licensees with the brand's new expression in 2027. In beauty, a campaign featuring musician Olivia Dean highlights Burberry's updated marketing approach.
As part of a leadership transition, chair Gerry Murphy announced his retirement effective November 2026, after eight years in the role. William Jackson, founder of Bridgepoint Group, will succeed him, beginning as a non-executive director in July.
Despite a cautious outlook on the macro environment, Schulman remains optimistic about Burberry's growth potential. “Over the past year, we have made significant progress, guided by our Burberry Forward strategy. We are seeing the impact on our business and our financial performance,” he told investors.
Source: https://www.vogue.com/article/burberry-hits-profit-as-turnaround-kicks-in
