Burberry Group (BRBY) H2 2025 earnings summary

Executive summary

• Total revenue was £2.46 billion for the year, with a significant improvement in the second half following the launch of the Burberry Forward strategy.

• Comparable retail sales fell 12% year-over-year, with the second-half decline improving to 5% from 20% in the first half.

• Adjusted operating profit reached £26 million for the year, with free cash flow of £65 million.

• Inventory overhang was addressed, reducing gross inventory by 7% year-over-year; gross margin for FY25 was 62.5%.

• Strengthened capital structure with a new £450 million bond issue, supporting liquidity and headroom.

Financial highlights

• Revenue fell to £2,461 million from £2,968 million year-over-year; gross profit dropped to £1,538 million from £2,009 million.

• Retail revenue declined 11% year-over-year; wholesale revenue decreased 35% in line with guidance.

• Licensing revenue grew 9%, driven by strong performance in fragrance, while overall licensing was down 2%.

• Gross margin fell 470 basis points year-over-year, mainly due to inventory clearance actions, ending at 62.5%.

• Adjusted diluted EPS was -14.8p, with a net loss attributable of £75 million versus £270 million profit prior year.

Outlook and guidance

• FY26 focus is on margin improvement, simplification, productivity, and cash flow, with retail space stable and wholesale revenue expected down mid-teens % in H1.

• Targeting £40 million incremental cost savings in FY26, totaling £80 million annualized, with £24 million already delivered; restructuring charge of £50 million expected.

• CapEx expected at around £130 million for FY26; currency headwinds anticipated to impact revenue by £55 million and operating profit by £10 million.

• FY26 seen as a year of stabilization, with focus on margin improvement and productivity.