London (AFP) – Burberry returned to profit in its first half, the British luxury fashion label said Thursday, thanks to progress in its cost-cutting plan launched two years ago. Net profit stood at £6 million ($8 million) in the six months to the end of September, compared with a loss of £26 million a year earlier, Burberry said in an earnings statement. Revenue rose six percent to £1.1 billion, and the company’s shares jumped more than seven percent in early deals on the London stock exchange.
Burberry began a turnaround plan at the end of 2024 aiming to boost sales and cut costs as the global luxury sector suffers from weaker demand in China. Under chief executive Joshua Schulman, Burberry has refocused on its staple outerwear, including its famed trench coats, in a bid to improve its fortunes. Comparable retail sales grew four percent in the first half, lifted by sales in its key China market and in the Americas.
“The CEO is now over two years into his tenure and has injected a breath of fresh air into the brand’s fortunes,” said Richard Hunter, head of markets at Interactive Investor. He noted that the company’s “strategy is gaining momentum as the brand increasingly resonates with the Gen Z cohort,” while also mentioning that “the transformation is still in its early stages, and that of course the fashion industry can be a fickle business.”
China is a key market for the luxury sector, but as the country’s post-pandemic recovery continues to struggle, consumption has flagged, sending jitters across the globe.
© 2024 AFP
