Gen Z Shoppers in China, Asia-Pacific Fuel Burberry Growth in Key Third Quarter

LONDON — Gen Z shoppers in China and across Asia-Pacific helped bolster Burberry's underlying retail sales by 3 percent in the key holiday trading quarter ended Dec. 27.

Double-digit growth among the cohort and a strong response from younger consumers worldwide helped Burberry to deliver another quarter of incremental growth as it pursues a major turnaround plan under chief executive officer Josh Schulman following two years of declining sales and profits.

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Burberry said in a trading update on Wednesday that overall retail revenue was up 1 percent to 665 million pounds at reported exchange, and 3 percent at constant rates. The 3 percent figure outstripped consensus estimates of a 2 percent rise, and sent the share price up 4 percent to 12.73 pounds at 8:30 a.m. GMT.

Comparable store sales rose 3 percent, versus a 4 percent decline in the corresponding period last year. Burberry said new store space had no impact on sales in the quarter and that growth came from existing units.

In the corresponding period last year, new store space contributed 1 percent to sales growth.

During the three-month period it was China that helped to drive comparable growth, with sales rising 6 percent. In Asia-Pacific, sales were up 5 percent in the period, while the Americas region grew 2 percent.

"During the festive quarter, we continued to build momentum with our Burberry Forward strategy, delivering sequential improvement in comparable sales growth and an improved quality of revenue across channels and geographies," Schulman said.

"Our customers responded to our immersive timeless British luxury campaigns and experiences, while the continued strength in our core outerwear category is now extending into accessories and ready-to-wear. The results give us confidence in the path ahead," he added.

The company said adjusted operating profit would be line with consensus for fiscal 2025-26, which ends on March 31. Burberry said it was confident in its ability to build on the progress made in "quality of earnings," as it continues to improve performance "and drive sustainable long-term value."

Burberry said that during the third quarter, it delivered a "higher quality" of revenue across all channels and regions, as it returned to a "shorter, shallower and more discreet" markdown period compared with the corresponding period last year.