Key Takeaways
- Burberry stock left the FTSE 100 last year but has just returned.
- The company made a loss in the last financial year.
- New CEO Joshua Schulman is credited with the turnaround, which focuses on key strengths and British branding.
While European luxury stocks are struggling this year, shares in UK-listed Burberry BRBY are enjoying a renaissance. Fund managers attribute this reversal of fortune to the company’s new chief executive, as well as a new product and marketing strategy.
This year’s 28% gain follows a turbulent period for the stock, which slumped in 2023 and 2024. After an exit from the FTSE 100 in 2024, the stock will return to the index on Sept. 22, FTSE Russell confirmed.
Industry experts blamed some strategic missteps and high personnel turnover for Burberry’s recent misfortunes—there have been four chief executives and three creative directors in a decade—combined with a wider downturn in global luxury spending.
Can investors trust this Burberry turnaround story when the company made a loss in the last financial year?
Who Is Burberry’s New CEO Joshua Schulman?
The company’s new chief executive Joshua Schulman, who took over in July 2024, is the driving force behind Burberry Forward, the strategy designed to bring the brand back to its roots after years of falling sales and share price volatility.
Schulman said in recent annual results that Burberry is “still in the early stages of our turnaround” but the “best days are ahead”.
Morningstar equity analyst Jelena Sokolova says that Schulman has reshaped Burberry into a “strong luxury house with a consistent message.”
She says that Burberry has reversed its previous move into leather goods, where long-established rivals like France’s LVMH MC dominate, to focus on items like trench coats.
“Burberry is refocusing on its core products (outerwear and scarves) in marketing messages and merchandizing, which we view positively,” she says.
For Jeremy A. Smith, head of UK equities at Columbia Threadneedle and fund manager of CT UK Growth & Income Fund, CT UK Equity Income Fund, and the CT UK Equity Alpha Income Fund, Schulman is key to Burberry’s turnaround story.
“All the stars have aligned for him … He was able to start in the job literally from the first morning knowing exactly what he knew needed to be done,” he says.
Schulman arrived at Burberry as a respected figure in the luxury industry. He previously served as CEO of Michael Kors and Coach and was president of New York department store Bergdorf Goodman.
His CV also includes stints at Jimmy Choo, Yves Saint Laurent, and Gucci.
Burberry Earnings: Losses Continue Despite Stock Rebound
Yet, the company still faces an uphill battle to profitability.
In its 2024/25 results published in May, Burberry posted a 17% year-on-year drop in revenue to £2.46 billion, down from roughly £3 billion the year before. The company made a pre-tax loss of £66 million, a 117% decline from £383 million it saw in the previous year. For comparison, in the 2023 financial year the company made a profit of nearly £500 million.
However, Columbia Threadneedle’s Smith still sees progress beneath the weaker figures arguing that Burberry is winning back both loyal and first-time customers by rethinking its pricing.
Burberry’s Schulman has raised prices in categories in which it is strongest like outerwear, he says, while cutting entry-level prices to welcome more aspirational shoppers.
Burberry’s Brand Pivot: Britishness
Stephen Yiu, manager of the Blue Whale Growth Fund, says an essential pillar of the Burberry turnaround story is emphasizing the brand’s Britishness, which is attributed to creative director Daniel Lee, who has been in post since 2022.
The company has leaned heavily on its London heritage in recent campaigns, enlisting celebrities to transmit an image of quintessential British identity in its summer 2025 campaign.
“Burberry are going back to the roots of Britishness … What happened over the last couple of years is the brand got diluted when they were trying to be more of a fashion house,” Yiu says.
Despite Burberry’s turbulent last few years, the brand continues to resonate with overseas shoppers. The Asia-Pacific region remains its largest market, generating more than £1 billion in revenue in the 2024/25 financial year.
“They have big markets in America, in Asia, and to a lesser degree in Europe as well. But these are still areas of growth for the company,” says Simon Murphy, fund manager of the VT Tyndall Unconstrained UK Income Fund.
“And what I like about going back to this strategy is Burberry doesn’t need to try and become ultra luxury. It has gone back to what the business always stood for historically.”
Is Burberry Stock a Buy, Sell, or Hold?
At the end of May, Morningstar’s Sokolova increased her fair value estimate for Burberry to £13.70 from £13.30 per share. The stock now sits in 3-star territory and is considered fairly valued at just below £13 after this year’s strong gains. Burberry was previously a 5-star stock.
After the results she said the shares had to factor in the company’s new strategic shift:
“We are reiterating our narrow moat rating and £13.70 fair value estimate for the name as we were already factoring in the recovery in sales and profits under the new strategy. As investors grew more comfortable around the turnaround, shares have rallied more than 70% catching up with our fair value assessment.”
Sokolova argues Burberry’s brand still has weight internationally, with its check pattern and trench coat line appealing to consumers’ desire for “conspicuous consumption.”
In the long term she expects revenue to be built upon Burberry’s renewed focus on core categories, while healthier cash flow margins should follow increased operating expenditure, or short-term spending, and reduced capital expenditure, or long-term spending.
Burberry Stock: The Bear Case
Yet, Burberry is not without challenges. Even its pivot to outerwear faces mounting competition from Moncler, Stone Island, and privately owned Barbour.
Sokolova also highlights currency risk as an obstacle: Around 30% of Burberry’s costs are denominated in sterling, compared with just 10% of revenue. That mismatch leaves the company exposed to FX volatility. The pound has risen from USD 1.24 to USD 1.37 this year.
Burberry is also not immune from the broader luxury slowdown in the trade war era. Inflationary pressures, a weaker Chinese economy, and 15% tariffs on EU goods entering the US have dragged on sector valuations.
The Fund Managers Backing Burberry Stock
Still, not all investors are deterred from investing in Burberry. Blue Whale’s Stephen Yiu counts Burberry as one of only two UK holdings in his fund, pointing to “idiosyncratic drivers” he believes can support Burberry’s performance even though luxury faces immense pressures.
“The attractiveness that we are seeing in Burberry in terms of a turnaround story is relatively significant compared to any other names that we do not own in the UK,” he says.
Another high-profile fund manager that has kept faith with Burberry has been Nick Train, manager of the Finsbury Growth and Income Trust FGIT, which has a Morningstar Medalist Rating of Bronze. The luxury stock makes up nearly 6% of the investment trust’s portfolio. In the trust’s latest update, the manager said that Burberry was one of the top three contributors to the month’s performance. Train had previously been criticized for holding on to the then underperforming luxury stock, which had dragged on the trust’s performance.
This article was updated on Sept. 4 after Burberry’s return to the FTSE 100 was confirmed.
