Burberry Shares Slide Despite Return to Growth Across All Divisions

Burberry Group (LON: BRBY) shares have fallen more than 5% in early trading on Friday after the luxury fashion house’s first-quarter update, even though the report showed the British brand returning to growth across all four of its divisions — Womenswear, Menswear, Accessories and Childrenswear — for the first time in three years.

Comparable retail sales rose 5% in the 13 weeks to 27 June, beating expectations, with Chief Executive Joshua Schulman hailing the “momentum” behind his Burberry Forward turnaround plan.

Outerwear was a standout, up double digits, while e-commerce grew mid-teens and Gen Z customer numbers rose sharply.

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Yet the sharp share price fall suggests investors are focusing on softer spots beneath the headline figures. EMEIA, Burberry’s largest region, saw comparable sales decline 3%, dragged down by the Middle East conflict and weaker tourist spend — a trend that has persisted for several quarters.

Japan also slipped 2% as Chinese inbound tourism remained subdued, tempering enthusiasm about the otherwise strong 9% growth in Greater China and 12% in the Americas.

Crucially, management reiterated that full-year progress on revenue growth and margin expansion remains “in line with expectations,” stopping short of upgrading guidance despite the quarterly beat.

Persistent caution around geopolitical and macroeconomic risks to consumer confidence has weighed on sentiment, overshadowing an otherwise encouraging set of operational results and leaving the stock as one of the FTSE 100’s biggest fallers on the morning.