As of this morning (22 September), Burberry (LSE:BRBY) has become a FTSE 100 share again. It’s only been away for a year but investors have clearly seen enough over the past 12 months to convince them that the British icon is on the road to recovery.
Over the past three years, the group has suffered from a downturn in the luxury fashion market, including a reduction in spending by tourists visiting Europe. But under new leadership, Burberry is seeking to focus on — what it believes — are its core strengths of outerwear and scarves. It’s also seeking to highlight its ‘Britishness’.
| Financial year (52 weeks ended) | Adjusted diluted earnings per share (pence) |
|---|---|
| 29.3.25 | (14.8) |
| 30.3.24 | 73.9 |
| 1.4.23 | 122.5 |
| 2.4.22 | 94.0 |
A work in progress
As yet, the hoped-for turnaround hasn’t been seen in the numbers. In its most recent update — for the three months ended 28 June — the group reported a 6% fall in retail revenue compared to the same quarter in 2024.
Of concern, the group said like-for-like store sales were continuing to fall in the Asia Pacific region (-4%) and Greater China (-5%). However, the position was better in the Americas (+4%) and Europe, Middle East, India and Africa (+1%). It admitted that it was still in the “early stages” of a recovery.
| Revenue by category | FY22 (£m) | FY23 (£m) | FY24 (£m) | FY25 (£m) |
|---|---|---|---|---|
| Accessories | 1,017 | 1,125 | 1,055 | 841 |
| Womenswear | 784 | 867 | 860 | 718 |
| Menswear | 807 | 868 | 842 | 732 |
| Childrenswear/Other | 177 | 184 | 149 | 104 |
| Licensing | 41 | 50 | 62 | 66 |
| Total revenue | 2,826 | 3,094 | 2,968 | 2,461 |
Indeed, on 9 September, its share price fell 8.3% after Bloomberg reported “cautious comments” made by company representatives at an international conference. No further details were provided.
Even so, the group’s share price has recovered nearly 95% since its 52-week low and its return to the FTSE 100 feels appropriate for a company that’s been around since 1856.
Well received
By coincidence, to mark Burberry’s return to the Footsie, at 7pm tonight, it will be showcasing its autumn collection at London Fashion Week.
Early feedback on the group’s new designs has been encouraging. Commenting on the fashion legend’s £2,000+ trench coat, Vogue described it as an “investment buy” and said Burberry “is the iconic label, after all“. Cosmopolitan was also impressed: “No trench coat roundup would be complete without an appearance from Burberry, and while this belted number won’t come cheap, you will be left with a classic that can be worn for years to come.”
If that’s not enough, Melania Trump was wearing one when she stepped off Air Force One at Stansted Airport on Tuesday (16 September) evening.
In July, Citi raised its 12-month price target from £12.50 to £16 after the company said it was attracting new customers as well as experiencing a growing wholesale order book and enjoying better in-store conversion rates.
In August, RBC Capital said Burberry was its top choice in luxury due to its recovery potential. Its price target is £15.
The consensus of analysts is more cautious — they have an average of £13.40. This is around 20% higher than its current price.
But I think there are signs that a comeback is under way, albeit a relatively slow one. The fashion house has recently re-entered The Lyst Index of “hot” brands. Rankings are determined by global internet searches as well as social media mentions and engagement statistics.
Of course, there are no guarantees that the luxury market will pick up. However, I think Burberry’s brand is strong enough to come through this setback. That’s why I reckon it’s a stock worth considering.
