The Burberry share price continues to rise despite falling sales!

Throughout the first hour of buying and selling at this time (18 July), the Burberry (LSE:BRBY) share worth was in every single place as traders digested the group’s newest buying and selling replace. At one level, the inventory of the style model was up almost 5%. It then moved into the purple earlier than recovering once more. By 9am, it was 2.8% increased.

A combined image

Traders appeared unsure of the group’s gross sales figures for the 13 weeks ended 28 June 2025. These confirmed a 6% fall in income in comparison with the identical interval in 2024. Nonetheless, if the influence of alternate price modifications is eliminated the drop is a extra modest 2%.

A better have a look at the press launch exhibits comparable retailer gross sales falling in its Better China (-5%) and Asia Pacific (-4%) territories. Japan was described as “difficult” however South Korea noticed some progress. Nonetheless, it was a greater image in its Americas and EMEIA divisions with progress of 4% and 1%, respectively.

General, the decline was higher than analysts had feared.

Maybe most importantly, in comparison with the final quarter, all areas noticed a rise in like-for-like retailer gross sales. Lengthy-time shareholders might be hoping that is the beginning of a restoration in each the corporate’s prime and backside traces.

Nonetheless work to be accomplished

Nonetheless, Burberry stays cautious. It mentioned: “We’re nonetheless within the early levels of our turnaround, and the macroeconomic surroundings stays unsure.”

It claims it’s made “early progress” in “reigniting model want”. Going ahead, the emphasis is on simplification, productiveness and money stream. It says it can have secured £80m of annualised price financial savings by the tip of its present monetary 12 months.

The replace comes after a depressing 12 months for the group. For the 52 weeks ended 29 March 2025, it recorded a post-tax lack of £75m, equal to twenty.9p a share. And it suspended its dividend.

Nonetheless, this morning’s improve in its share worth continued a rally that’s seen the group’s market cap improve by greater than 60% since July 2024. Over this era, it’s been one of many prime 5 finest performers on the FTSE 250.

After such a very good run, possibly some traders determined it was time to money out. Maybe that’s why the share worth was decrease after the primary half-hour of buying and selling.

A tough sector

Burberry’s not the one luxurious trend home to expertise falling gross sales. Most of the world’s most well-known labels are having to deal with a tough financial backdrop.

However the British icon’s been round since 1856. It’s survived loads of downturns earlier than and I’m assured that it’ll get by means of this one. With all of the current unhealthy information, it’s simple to lose sight of the enduring energy of its model.

And I feel there’s sufficient on this morning’s announcement to counsel the worst is perhaps behind it.

However with its emphasis on outerwear, autumn is a key interval for Burberry. It due to this fact appears like a good suggestion to come back again and revisit the funding case as soon as the model’s revealed how its upcoming assortment of trench coats, rainwear and different items have been obtained by fashion-conscious consumers. In the mean time, investing within the inventory could be just a little too dangerous for me.