Burberry lifts profit as wholesale revenue rises 17%

By Tom Whitfield

Burberry, the British luxury group, generated £1.098 billion in revenue in the 26 weeks to 26 September 2026, up 6% year on year at constant exchange rates, as its turnaround delivered a fifth consecutive quarter of comparable sales growth.

Comparable retail sales rose 4% in the first half, matching the second-quarter rate. Adjusted operating profit reached £62 million, against £19 million a year earlier, while adjusted operating margin expanded 390 basis points to 5.7%.

Reported operating profit was £54 million, versus a £20 million loss in the prior period. The adjusted profit gain was £43 million, more than tripling the previous result. The margin expansion shows operating costs falling more slowly than revenue, although Burberry did not identify which cost lines drove the change.

Burberry attributed the result to continued progress under Burberry Forward, the strategy launched two years ago by Chief Executive Joshua Schulman. Schulman said: “Five consecutive quarters of growth and improved quality of sales demonstrate that our strategy is working.” That is a management assessment; the sales, margin and cash figures are the measurable test.

Where did growth come from?

Burberry said growth ran across womenswear, menswear, childrenswear and accessories. Outerwear delivered double-digit growth, leathergoods gained momentum in the second quarter, and e-commerce sales increased by mid-teens. The disclosed figures do not assign exact category values, so those descriptors do not establish precise volume or margin contributions.

Regional performance was uneven:

• The Americas: comparable sales rose 12% in the first half.
• Greater China: comparable sales rose 7%.
• Asia Pacific: comparable sales rose 3%.
• EMEIA: comparable sales fell 2%, which Burberry attributed to lower tourist activity and weaker traffic, particularly in outlet stores.

The 14-percentage-point gap between the Americas and EMEIA shows why the group result cannot stand in for every channel or territory. Burberry’s explanation points to traffic and tourism pressure in EMEIA, but it provides no separate outlet, country or profitability figures.

What do wholesale and cash show?

Wholesale revenue increased 17% at constant exchange rates, ahead of the company’s guidance. That measure is not directly comparable with the 4% comparable retail-sales figure, but wholesale posted the faster reported expansion. For factories and vendors, the revenue signal does not disclose unit volumes, factory allocations, lead times or who carries inventory risk.

Gross margin improved 40 basis points to 68.3%. The result indicates a modestly better cost or product-mix equation, though Burberry did not separate those drivers. Free cash flow was £125 million, broadly in line with £126 million a year earlier. Cash generation therefore remained essentially flat despite the sharper operating-profit recovery.

What is guided for FY27?

Burberry expects revenue growth and margin expansion in FY27 while acknowledging an uncertain external environment. Its stated targets are:

• Wholesale revenue growth of 10% to 12%.
• Capital expenditure of around £100 million.
• Annualised savings of approximately £100 million, after £80 million delivered in FY26.

The savings headline stands £20 million above the prior-year delivery, but the announcement does not allocate savings by function or explain their timing. The wholesale target is also below the 17% increase recorded in the first half, making the planned growth rate a more conservative commercial benchmark.

What does Frasers’ exposure change?

The results followed renewed interest in Burberry from Frasers Group. In October, Frasers disclosed that its financial exposure to the luxury house was equivalent to 7.4% of voting rights, held through put options rather than direct share ownership.

The distinction matters. The 7.4% figure describes financial exposure, not a conventional 7.4% equity stake, and no direct-share purchase has been confirmed. The announcement does not specify the option terms or any accompanying control rights.

What does this change for suppliers?

For brands, factories and vendors, the near-term task is to test whether Burberry can convert its wholesale ambition into orders without surrendering the 5.7% adjusted operating margin. The company has supplied revenue, channel and savings targets, but the results do not state factory-level commitments, certification updates or lead times.

Those omissions keep capacity, compliance and sourcing decisions provisional. A stronger wholesale line may support order planning, but the published figures do not disaggregate unit volume, pricing, product mix or channel mix.

FY27 will be judged by whether Burberry can turn a sharper profit line into durable cash growth and a larger wholesale channel without losing margin.