Burberry Returns to Profit as Back-to-Basics Strategy Revives Sales

British luxury fashion house Burberry has returned to profit after two years of restructuring, with its back-to-basics strategy helping revive demand for its coats, jackets, handbags and other heritage products. The company reported stronger sales in China and the Americas, alongside improvements in online and wholesale channels, as it seeks to rebuild its position in a challenging global luxury market.

For the 26 weeks ended September 26, 2026, Burberry reported revenue of £1.098 billion, up 6% year over year. Its adjusted operating profit increased to £62 million from £19 million a year earlier, while comparable retail sales grew 4%. The results indicate that the company’s Burberry Forward turnaround programme is beginning to translate into improved financial performance.

Burberry Returns to Profit in First Half of FY27

Burberry’s latest interim results show a significant improvement compared with the corresponding period last year.

The company recorded a reported operating profit of £54 million, compared with an operating loss of £18 million in the first half of FY26. Its adjusted operating profit rose to £62 million from £19 million, representing growth of 225% on a reported basis.

Burberry also returned to a pre-tax profit of £19 million for the six-month period, compared with a pre-tax loss of £48 million a year earlier, according to The Guardian.

The improvement reflects stronger sales, better retail performance and tighter control over operating expenses. The company said its strategy had helped improve the quality of sales while restoring momentum across its major product categories.

Burberry’s key financial figures:

Financial metric	H1 FY27	H1 FY26
Revenue	£1,098 million	£1,032 million
Comparable retail sales growth	4%	0%
Adjusted operating profit	£62 million	£19 million
Adjusted operating margin	5.7%	1.9%
Reported operating profit/(loss)	£54 million	(£18 million)
Pre-tax profit/(loss)	£19 million	(£48 million)

Figures relate to the 26 weeks ended September 26, 2026, and the corresponding prior-year period. Adjusted operating profit and reported operating profit are different accounting measures. <Cite refs={[“turn899768search0″,”turn899768search1”]}/>

What Is Burberry’s Back-to-Basics Strategy?

Burberry’s recovery is being driven by its Burberry Forward programme, introduced under chief executive Joshua Schulman in 2024.

The strategy focuses on restoring the brand’s traditional identity as a British luxury fashion house rather than relying too heavily on fashion trends or aggressive premium positioning.

The company has placed greater emphasis on its established strengths, particularly outerwear, trench coats, scarves, leather goods and products associated with its heritage.

The approach also involves making the brand more accessible to a wider range of luxury consumers through a broader product and pricing strategy.

Burberry has introduced products at different price points, including more affordable accessories alongside premium handbags and outerwear. Its pricing strategy is designed to attract customers who remain interested in luxury brands but have become more cautious about expensive purchases.

Chief executive Joshua Schulman has described the company’s approach as a way to return Burberry to its traditional position in the luxury market.

The company believes that a clearer product identity and a stronger connection with its British heritage can help distinguish it from competitors

China and the Americas Drive Sales Growth

Regional performance played an important role in Burberry’s first-half recovery.

According to the company’s results, comparable retail sales increased 12% in the Americas and 7% in Greater China during the first half of FY27. Asia Pacific recorded growth of 3%, while the Europe, Middle East, India and Africa (EMEIA) region declined 2%.

The Guardian separately reported that total sales increased 15% in China and 14% in the Americas, while sales in Europe and the Middle East fell 1%.

The stronger performance in China is particularly important because the country remains a major market for international luxury brands. Burberry has been using locally relevant marketing campaigns and product offerings to connect with Chinese consumers.

The Americas have also provided an important source of growth, with stronger demand supporting the company’s overall performance.

However, the weakness in EMEIA highlights the uneven nature of the luxury market. Reduced international tourism and cautious consumer spending have affected some traditional luxury shopping destinations.

Burberry’s latest results suggest that local customers in key markets are providing support even as international tourist spending remains under pressure.

Outerwear and Handbags Lead the Recovery

Burberry’s product strategy is centred on categories closely associated with its history.

Outerwear recorded double-digit growth during the first half, supported by demand for lightweight jackets and rainwear. The company has also reported strength in leather goods, with performance accelerating in the second quarter.

These categories are important because they connect Burberry’s current collections with its established reputation for British outerwear and distinctive accessories.

The company is also working to improve how products are presented in its stores. Category-focused retail spaces and better store productivity are intended to make it easier for customers to discover products and purchase across different categories.

E-commerce revenue increased by a mid-teens percentage during the first half, providing another source of growth.

Wholesale revenue also rose 17%, ahead of the company’s expectations, reflecting improved demand from strategic retail partners.

Together, these developments indicate that Burberry’s recovery is not dependent on a single sales channel. Its retail stores, online business and wholesale operations have all contributed to the improvement.

Profit Margins Improve as Costs Remain Under Control

Burberry’s financial recovery has also been supported by an improvement in profitability.

Its adjusted operating margin increased to 5.7% from 1.9% in the previous year, representing an improvement of 380 basis points on a reported basis and 390 basis points at constant exchange rates.

Gross margin reached 68.3%, an improvement of 40 basis points at constant exchange rates.

The company said net operating expenses remained flat at constant exchange rates, supported by continuing cost-efficiency measures. At the same time, Burberry continued investing in marketing and other initiatives intended to support future growth.

However, the company still faces pressure on cash generation. Free cash flow was negative £147 million during the first half, compared with negative £50 million in the corresponding period last year.

The company said its free cash flow remained on plan and highlighted improvements in inventory management and supply-chain operations.

Burberry’s leverage ratio stood at 1.7 times, while the company said its balance sheet had strengthened year over year.

Burberry Maintains FY27 Growth Expectations

Following the latest results, Burberry said it expects to make further progress towards its financial ambitions during FY27.

The company is targeting revenue growth and further margin expansion, although management acknowledged that the external environment remains uncertain.

The luxury sector continues to face several challenges, including inflation, geopolitical tensions, weaker tourism and changing consumer preferences. Customers in some markets are also becoming more selective about high-priced luxury purchases.

Burberry’s strategy is therefore focused on maintaining product relevance, strengthening its established categories and improving the value proposition for customers.

The company also plans to provide a more detailed update on its longer-term ambitions at a Capital Markets Day scheduled for March 2027 in London.

The Bigger Picture

Burberry’s return to profit offers an indication that established luxury brands can rebuild demand by focusing on their strongest product categories and reconnecting with their traditional customer base.

The company’s results also reflect a shift in the luxury market. Consumers are increasingly paying attention to product value, quality and brand identity rather than simply accepting higher prices. Burberry’s broader pricing range and renewed emphasis on heritage products are intended to respond to those changing preferences.

However, one profitable half-year does not guarantee a sustained recovery. The company must continue delivering sales growth while improving margins, managing inventory and competing with larger international luxury groups.

Looking Ahead

Burberry’s next challenge will be maintaining its sales momentum through the second half of FY27, particularly during the important holiday and winter shopping periods. Demand for outerwear, leather goods and accessories, along with continued growth in China and the Americas, will be important indicators of whether its turnaround strategy can deliver consistent results.

The March 2027 Capital Markets Day will provide another opportunity for investors to assess the company’s longer-term plans. For now, Burberry’s improved revenue, operating profit and comparable retail sales suggest that its return to heritage-led products and a broader pricing strategy is beginning to produce measurable results.