MULBERRY GROUP (MUL) H2 2025 earnings summary

Executive summary

• Revenue declined 21% year-over-year to £120.4m, reflecting a global luxury market contraction and challenging macroeconomic conditions, especially in the UK and Asia Pacific.

• Loss before tax improved to £31.8m from £34.1m last year, aided by a 17% reduction in operating expenses following a forensic spending review and business rightsizing.

• New leadership and a revitalised strategy, 'Back to the Mulberry Spirit', launched in January 2025, focusing on simplification, brand realignment, and customer connection.

• A £10m capital raise and a post-year-end £20m convertible loan note were secured to strengthen the balance sheet.

Financial highlights

• Gross margin fell to 66.8% from 70.1% due to increased promotional activity and adverse production variances.

• Underlying loss before tax was £23.7m, slightly higher than last year’s £22.6m, reflecting lower revenue and margin, partially offset by cost reductions.

• Digital sales accounted for 36% of group revenue, down 14% year-over-year.

• Inventory levels reduced by £14.9m, improving working capital.

• No dividend declared for the year.

Outlook and guidance

• Revenue for the 9 weeks post-period end is 18% below the same period last year, but like-for-like retail and digital sales are only 5% down due to exiting loss-making locations.

• Focus remains on rebuilding gross margin and restoring profitability in the near term.

• Mid-term targets include annual revenue over £200m and a 15% adjusted EBIT margin.