Burberry Group (BRBY) H2 2025 earnings summary

Executive summary

• Total revenue was £2.46 billion, with a significant improvement in the second half following the launch of a new brand strategy, though revenue declined 17% year-over-year and comparable retail sales fell 12%.

• Adjusted operating profit reached £26 million for the year, with H2 profit of £67 million offsetting an H1 loss of £41 million.

• Free cash flow was £65 million, supported by inventory reduction and cost savings of £24 million.

• Inventory levels reduced by 7% year-over-year, exceeding guidance and addressing overhang.

• Strengthened capital structure with a new £450 million bond issue and suspended dividend to prioritize investment and balance sheet strength.

Financial highlights

• Revenue fell to £2,461 million from £2,968 million year-over-year; comparable retail sales down 12% and retail revenue declined 11%.

• Wholesale revenue decreased 35%, in line with guidance; licensing revenue grew 9% driven by fragrance, though another source notes licensing down 2%.

• Gross margin declined 470 basis points year-over-year to 62.5%, mainly due to inventory actions.

• Adjusted diluted EPS was -14.8p, with a net loss attributable of £75 million.

• Net debt at period end was £1.1 billion including lease liabilities; net debt to adjusted EBITDA at 2.3x.

Outlook and guidance

• FY2026 is positioned as a year of stabilization and margin improvement, with focus on cost savings, simplification, and productivity.

• Annualized cost savings targeted at £80 million in FY2026, with £24 million already delivered and a restructuring charge of £50 million expected.

• CapEx guidance at £130 million; retail space expected to remain flat.

• Wholesale revenue expected to decline by mid-teens % in H1.

• Currency headwind of £55 million on revenue and £10 million on operating profit anticipated.