Burberry Group PLC (LSE:BRBY) shares strutted 4% higher as the British fashion house reported a return to like-for-like sales growth in the second quarter, marking an early sign of progress in its strategy under chief executive Joshua Schulman. Revenue for the 26 weeks to 27 September 2025 came in at £1.03 billion, down 5% at reported rates, while adjusted operating profit of £19 million compared to a loss of £47 million a year ago.
The luxury brand booked a 2% rise in comparable store sales, the first increase in two years.
Louis Vuitton Moet Hennessy (EPA:MC) reported a smaller decline in sales in the past quarter than was feared by the market, lifting its shares over 11% and boosting those of its sector peers, including Burberry Group PLC (LSE:BRBY) and Watches of Switzerland Group PLC (LSE:WOSG). The owner of Christian Dior, Givenchy, Bulgari and Tiffany owner posted third-quareter results showing revenues of €18.28 billion, which was down 4% compared to the prior year, which was 0.6% ahead of the average analyst forecast.
Luxury investors have found their appetite again
Short interest is an imperfect but useful indicator of investor sentiment. Healthy pullbacks on even the most bullish stocks are a normal part of a healthy market.
Burberry's turnaround drive, which has tapped Oscar winner Olivia Colman and Oasis frontman Liam Gallagher to champion its British heritage and classic trench coats, faces a fresh test on Monday when it unveils its latest designs at London Fashion Week.
Burberry Group PLC (LSE:BRBY) and newly listed Metlen Energy & Metals PLC (LSE:MTLN) will be promoted to the FTSE 100 as part of the September quarterly review. Index provider FTSE Russell said they will replace housebuilder Taylor Wimpey PLC (LSE:TW.
The upgrade to the blue-chip index comes as part of a quarterly reshuffling. The luxury group fell out of the FTSE 100 in September 2024, bringing its 15-year run in the U.K. large-cap index to a close.
Shares in Burberry Group PLC (LSE:BRBY) edged higher on Tuesday, bucking weakness elsewhere in the luxury sector after Hugo Boss highlighted the challenges facing global fashion groups. The German group warned that consumer sentiment remains weak worldwide.
Citi has lifted its price target on Burberry Group PLC (LSE:BRBY) to £16, up from £12.50, citing growing signs that the British luxury brand's turnaround plan is starting to gain traction under chief executive Jonathan Akeroyd and newly appointed creative director Daniel Lee. The broker kept its ‘Buy' rating and upgraded earnings forecasts slightly across the next three financial years, following a third straight quarter of improvement in like-for-like retail sales.
Burberry's Q1 FY2026 results show slower revenue decline and better-than-expected comparable sales, but the business remains fundamentally challenged, especially in Asia. CEO Josh Schulman's cost-cutting and strategic refocus on core products are stabilizing the company, but macroeconomic headwinds in China persist. The recent share price surge has already priced in much of the Burberry Forward transformation benefits, making the stock less attractive at current levels.
Burberry sales in the Americas rose 4% year-on-year in the fiscal first quarter, indicating the green shoots of a turnaround at the luxury brand. The luxury brand attributed the uptick to both new and existing consumers.