After occupying an uncomfortable middle ground in global luxury, Burberry’s latest quarterly results suggest that the long reset may finally be gaining traction, particularly in Asia. Retail revenue rose 1 per cent year on year to 665 million euros, or 3 per cent at constant exchange rates, while comparable store sales returned to growth, up 3 per cent after a difficult prior-year comparison. Asia emerges as the engine Asia once again proved to be Burberry’s most reliable source
e source of momentum. Comparable sales in Greater China rose 6 per cent in the quarter, doubling from Q2.
Joshua Schulman, CEO of Burberry, said growth was led by domestic consumers in key mainland cities, with outbound Chinese spending still soft. Chinese luxury spending has become more domestic since the pandemic, and brands that rely on cross-border travel have struggled to adapt.
He pointed to double-digit growth among Gen Z customers in Greater China, making younger shoppers a central pillar of the brand’s China strategy. Crucially, the growth is being driven by conversion and higher average unit retail prices, not rising footfall.
Store traffic remains challenging, management acknowledged.
While Asia Pacific accelerated 5 per cent, led by a sharp rebound in South Korea, where sales climbed 13 per cent. Japan, by contrast, remained subdued at 2 per cent growth amid softer tourist traffic.
Executives pointed to double-digit growth among younger customers in both Greater China and Asia Pacific, driven by higher conversion rates and stronger average unit retail prices rather than footfall growth, which remains challenging across markets.
Product discipline over hype
Under chief executive Schulman, Burberry has leaned hard into what it calls ‘Timeless British Luxury’: outerwear, scarves and recognizable brand codes rather than fashion-forward experimentation.
Outerwear and scarves both delivered double-digit growth in the quarter, with momentum now extending into handbags and ready-to-wear. Cashmere-heavy items, Kensington trench coats, knitwear with the Equestrian Knight Device and heritage checks, performed particularly well in China and Korea, according to management.
Burberry has refined a ‘Good, Better, Best’ structure across key categories, allowing entry-level items to capture aspirational consumers while preserving margin at the top end. Importantly, the company has pulled back from the heavy, public discounting that weighed on brand perception last year, returning instead to shorter, more discreet private sales.
Retail theater, not retail sprawl
Unlike peers that continue to expand aggressively in Asia, Burberry is not chasing growth through square footage. Retail space was flat in the quarter, and management signaled that store count will remain broadly stable through FY26.
The rollout of “scarf bars”, 190 globally, with 200 expected by year-end, has become a central pillar of the strategy, encouraging personalization and cross-category purchasing. Half of all scarf purchases during the festive period were personalized, a small but telling indicator of customer engagement.
High-impact activations have also played a role, from a Bloomingdale’s takeover in New York to an ice-skating rink installation in Beijing and a festive pop-up at London’s Claridge’s.
Cautious confidence, not exuberance
Despite the improved momentum, management struck a deliberately measured tone on the outlook. Adjusted operating profit for FY26 is expected to be in line with consensus, with no upgrade despite the better-than-expected Q3 performance.
Currency remains a headwind, with foreign exchange expected to shave around 50 million euros off revenue and 5 million euros off operating profit this year. Wholesale revenue is forecast to decline by a mid-single-digit percentage, reflecting Burberry’s ongoing pruning of smaller, non-strategic accounts.
Further reading: Is Burberry back in action after a return to growth?