As Burberry reclaims a spot in the FTSE 100, where next for the share price?

The final 12 months has witnessed  exceptional volatility within the Burberry (LSE: BRBY) share worth. Bottoming at 556p in September 2024, the inventory initially doubled in worth solely to retrace following the tariff-induced sell-off. Nevertheless, with constructive vibes round progress within the firm’s technique (generally known as Burberry Ahead) lifting investor sentiment, the inventory is now heading again into the FTSE 100.

New technique

Again in July the corporate reported a lacklustre set of numbers for the primary quarter of 2026. Comparable retail gross sales fell 1% and retail income fell 2%. However generally the numbers don’t inform the complete story. What buyers actually wished to know was the state of progress towards its new technique.

The core of the retailer’s technique may be very easy: to reignite model need. All through Q1, it launched a sequence of distinctive advertising campaigns, every geared towards completely different buyer archetypes.

Its Excessive Summer time marketing campaign, which noticed two fashions bounce off a ship in Burberry swimwear, focused a youthful viewers. This was adopted by a collaboration with Highgrove, with a way more refined narrative, concentrating on a extra classically-minded buyer. Every advertising initiative basically centered on completely different parts of Britishness.

Autumn assortment

What significantly excited me was the launch of its Autumn 25 assortment through the quarter. That is the primary full launch underneath the brand new Burberry Ahead strategy. Early indicators are promising with the enterprise reporting a considerably increased sell-through than on final 12 months’s assortment.

In fact, the enterprise is most related to outwear and except its designs can resonate with prospects, a sustained restoration is unlikely.

Executing on outwear is at first constructed on product technique. For the summer time, its Blackpool jacket with a novelty test trim zipper turned out to be a runaway success. It has additionally been utilizing its Knight Stamp closely. This seems throughout many items in its assortment.

I’d anticipate rather more of those kind of initiatives as every season’s campaigns come round.

Dangers

The brand new CEO has been very cautious to not get too far forward of himself. Warning stays the secret, with the turnaround nonetheless very a lot in its infancy.

The financial backdrop is hardly conducive to a growth in luxurious spending. LVMH, the French luxurious large that owns Louis Vuitton, Dior and different labels, has turned to operational efficiencies to offset a decline in top-line development. Burberry has already introduced that it intends to chop 1,700 posts within the UK.

Lots of the cost-saving initiatives instigated are anticipated to ship advantages within the second half of FY26. However there’s solely a lot fats a enterprise can take away, and no cost-saving initiative is ever going to ship income development.

Backside Line

Throughout the peak of the inventory’s sell-off there have been a number of rumours round it doubtlessly being swallowed up by a competitor. And I believe many luxurious conglomerates can be even happier to have a revived Burberry of their portfolios.

Success in investing to me usually comes all the way down to taking positions in companies that others is not going to contact. Contrarian investing is a dangerous technique. However with Burberry’s 170-year historical past, and with an urge for food for it amongst customers for luxurious more likely to develop sooner or later, I’ve been shopping for steadily this 12 months.