Burberry Group saw a 1% drop in retail revenue in the first quarter, a significant improvement from the 6% decrease in the previous quarter. The stock rose over 3% in response to the positive results. The company’s “Burberry Forward” strategy, launched in 2024, is showing early signs of success with a 2% sales decline in constant currency in the first quarter of fiscal 2026.

Sales recovery was driven by the Americas and Europe, the Middle East, India, and Africa regions, while Asia and Greater China remain challenging. Burberry attracted new clients in the US and performed well with local European customers. Outerwear and scarves categories outperformed, signaling positive momentum for the brand.

Profit growth may be slow in the first half due to marketing initiatives like the “Burberry Festival” campaigns, but cost-cutting measures are expected to boost profitability in the second half. The response to autumn campaigns has been encouraging, supporting the company’s recovery efforts.

Morningstar reaffirms its narrow moat rating and GBX 1,370 fair value estimate for Burberry, reflecting the expected sales and profit rebound under the new strategy. Shares have surged over 70% in the past year as investors gain confidence in the company’s turnaround.

Read more at Morningstar: Burberry: Further Positive Momentum