Burberry's Turnaround: A Festive Revival

Burberry reported a smaller than anticipated 4% drop in quarterly comparable store sales, bolstered by robust demand during the holiday season in the U.S. CEO Joshua Schulman credited targeted advertising highlighting key products like trench coats. The company's transformation shows promising early signs, with improved performances across regions.

Burberry reported an unexpectedly modest 4% decline in quarterly comparable store sales, driven by vigorous holiday season demand in the United States—an encouraging development in their ongoing turnaround efforts. The company's shares, having already seen an 80% rise since September, were predicted to surge approximately 10% at market opening.

CEO Joshua Schulman, who assumed leadership six months ago, attributed the success to festive advertising campaigns emphasizing Burberry's iconic trench coats and scarves. Schulman aims to refocus the brand on these renowned products to recapture customers alienated by unfamiliar designs and elevated prices.

Despite being in the early stages of transformation, Burberry expressed encouragement at the festive season's customer response. Analysts had anticipated a 12% sales drop for the company's third quarter ending on December 28. Notably, the Americas surfaced as the only region with a 4% sales growth. Sales in Asia Pacific, EMEIA, and other regions also showed significant recovery from previous quarters, and the brand expects profitability for the year ahead.

(With inputs from agencies.)