Burberry Group plc

For FY26, Burberry reported stable revenue at constant exchange rates and a 2% decline on a reported basis. Comparable retail sales rose 2% for the year, with Q4 comp sales up 5%; Greater China and the Americas were both up 10% in Q4, and full-year growth was 4% in Greater China, flat in EMEA, 4% in the Americas, and 2% in APAC. Gross margin was 67.9%, up 530 basis points at constant exchange rates, adjusted operating profit was GBP 160 million versus GBP 26 million last year, adjusted operating margin was 6.6%, net finance charge was GBP 66 million, adjusted EPS was 15.2p, free cash flow was GBP 141 million, and net debt to adjusted EBITDA was 1.6x versus 2.3x a year ago. Looking to FY27, the company expects retail space to be broadly stable, wholesale revenue to grow by mid-single-digit percentage in the first half, about GBP 100 million of annualized cost savings with around GBP 5 million of restructuring-related adjusting items, capital expenditure of about GBP 120 million, a GBP 10 million currency headwind on revenue and adjusted operating profit, and an effective tax rate of 27% to 30%.

Josh Schulman framed FY26 as a clear inflection point for Burberry, saying the company has moved from stabilization to growth under Burberry Forward. He emphasized stronger brand relevance, particularly with Gen Z, and said the company’s heritage categories such as scarves and outerwear have reignited demand and are now extending into other categories. He also pointed to a more cohesive product offer, more disciplined pricing, and a strategy focused on “all kinds of weather,” not just winter.

Kate Ferry highlighted the operating improvement across the P&L: gross margin at 67.9%, adjusted operating profit at GBP 160 million, adjusted EPS at 15.2p, and free cash flow at GBP 141 million. She said GBP 80 million of the GBP 100 million annualized savings target has already been delivered in FY26, with about GBP 5 million of one-off costs expected in FY27 and around GBP 50 million total related to the restructuring plan. She also noted capex of GBP 113 million in FY26, expected to be about GBP 120 million in FY27, and reduced borrowings of GBP 511 million after repayment of the maturing GBP 300 million sustainability bond.

Analysts pressed on whether the improvement depends too heavily on higher marketing spend and whether that is sustainable; management replied that marketing remains a high-single-digit percentage of sales and is a deliberate part of the turnaround, alongside product and store initiatives. Questions also focused on gross margin durability, capital allocation, and reinstating the dividend; Kate Ferry said Burberry is targeting a gradual move back toward 70% gross margin over the medium term, intends to reinstate the dividend when the Board is ready, and is prioritizing investment in the business for now. Other questions addressed Saks, outlets, and customer retention; management said Saks remains an important partner, the outlet network is about 13% of stores and broadly acceptable, and a new clienteling pilot should help convert first-time customers into repeat buyers in FY27.