Burberry shares fell on Friday after the release of a steady yet largely uninspiring first-quarter trading update.
Burberry’s comparable retail sales rose 5% in its first quarter, with the British luxury house recording growth across Womenswear, Menswear, Accessories and Childrenswear for the first time in three years.
The Americas led the way with 12% growth, supported by local demand and broad-based customer acquisition, while Greater China rose 9% helped by outsized growth among Gen Z shoppers. Asia Pacific grew 3%, with South Korea up 11%, offsetting a 2% decline in Japan, where inbound Chinese tourism continues to fall.
China has long been a leading source of growth for Burberry, and some investors may have hoped for stronger performance there.
EMEIA declined 3%, reflecting the ongoing impact of the Middle East conflict and lower tourist spend, excluding the Middle East, the drop was 1%. This was largely to be expected, but still not welcome news.
“The market had hoped for clearer evidence of accelerating momentum or more bullish commentary on the outlook. With store traffic remaining challenging and the macro environment still uncertain, the update was viewed as in-line rather than a catalyst for upgrades,” said Adam Vettese, market analyst for etoro.
Retail revenue reached £455m, up 5% at reported rates, with store productivity improving through clienteling and category destinations — including 97 polo galleries launched by Father’s Day, building on the rollout of scarf bars.
Burberry has increased its first-half wholesale guidance to high-single-digit growth following a positive response from partners, and expects full-year revenue growth and margin expansion in line with expectations, while remaining mindful of the uncertain geopolitical and macroeconomic backdrop.
Overall, Burberry’s update was relatively positive, but it wasn’t enough to allay fears about the wider luxury sector.