Burberry (BRBY) FY2025 Q3 Earnings

shares Burberry The company’s shares rose 16% on Friday after it reported a smaller-than-expected drop in fiscal third-quarter sales, providing the first glimpse of Chief Executive Officer Joshua Schulman’s plans to reinvent the troubled company. of British fashion houses.

Comparable sales fell 4% in the three months to December. Analysts had expected a 12% decline in the consensus estimate compiled by the company.

The stock had pared gains slightly, rising 12.9% as of 10:00 a.m. London time, with other luxury goods stocks also trading higher.

Total revenue during the holiday shopping period was £659 million ($816 million), down 7% year-on-year at reported exchange rates.

Sales in Asia Pacific and Europe, the Middle East, India and Africa fell 9% and 2% respectively, but sales in the Americas increased 4%, reflecting broader market demand. U.S. consumer spending recovers The entire luxury industry.

The company said it was now “more likely” that second-half results would broadly offset first-half adjusted operating losses.

Schulman said he was “encouraged” by customer response to Burberry’s latest campaign, but noted that the brand’s transformation was still in its early stages and “there’s still a lot of work to do.”

“Since launching Burberry Forward last November, we have been accelerating our strategy to reignite desire for the brand, improve performance and drive long-term value creation,” he said in a statement released on Friday.

“The acceleration in our core categories reinforces our belief that Burberry has the greatest opportunity where we are most authentic and that our strategic plan will deliver sustainable profitable growth over time.”

Chief Financial Officer Kate Ferry said the company has not set a timetable for the restructuring but hopes to return to its recent success in the short term.

“This is definitely where we intend to get back to. It’s still early days,” she said in response to questions from CNBC on an earnings call.

Ferry also said the company may hope to benefit from “encouraging macro trends” boosting U.S. consumption, but is not currently factoring that into its forecast. As analysts predicted U.S. sales continue to riseIt comes as consumers benefit from a stronger U.S. dollar, cryptocurrency gains and a market rally sparked by President Donald Trump.

Shulman announced in November Emergency plan to ‘correct course’ The company has been underperforming for a long time due to falling sales and a series of management changes.

Schulman said the plans were aimed at returning the brand to its “original purpose,” sending Burberry’s stock price to a record high and has since continued to move higher as investor confidence has returned.

The announcement is released alongside Burberry’s results for the first half of the year ended September 28, 2024, during which Sales shrank 20% for the second consecutive quarter.

This strategic adjustment marks the Latest iteration This 169-year-old retailer. Shulman join in He left Michael Kors in July, becoming the brand’s fourth CEO in nearly a decade.

Analysts welcomed the results as a positive early sign for the brand, with RBC noting the company’s special efforts to streamline stores and collections.

“We believe these results are a first (and early) step in the right direction. Simple fixes related to store layout and presentation, a renewed focus on core product categories and of course a contribution from price reduction activity all contributed to the improvement contribution,” RBC analysts Piral Dardanha and Richard Chamberlain wrote in a note on Friday.

The results came amid a sharp uptick in luxury goods sales during the holiday season, with Cartier owner Richemont reporting last week that ‘Highest ever’ quarterly sales figuresboosting hopes for a long-awaited turnaround in the troubled luxury goods market.

Consumer Mamta Valechha said: “There are many factors contributing to this positive surprise. First, Richemont’s recent results show an overall improvement in demand in all countries, while Burberry’s sales in all regions There has also been a sequential improvement in demand, especially in the United States,” said Qualter Cheviot’s discretionary analyst.

“In addition, Burberry’s efforts to clear inventory through deep discounts have helped boost sales and effectively manage inventory levels. Encouragingly, Burberry’s back-to-basics strategy may be starting to show positive results and resonate well with consumers.” additional.