Jan 21 (Reuters) - Burberry forecast on Wednesday annual profit to be in line with analyst expectations, after third-quarter comparable store sales rose 3%, as the luxury brand's turnaround centred on
Burberry Surpasses Holiday Sales Projections Driven by Gen Z in China
Burberry's Sales Performance and Marketing Strategies
By Helen Reid and Pushkala Aripaka
Impact of Gen Z on Sales
Jan 21 (Reuters) - Burberry beat expectations for sales growth in the key holiday quarter as its marketing push featuring British celebrities resonated with shoppers and helped attract more Gen Z consumers in China, sending its shares up more than 4%.
Marketing Initiatives in China
Joshua Schulman, who became CEO in July 2024 as sales were sliding, is leading a turnaround focused on trench coats, scarves and the brand's British heritage, while cutting costs after reducing the workforce by 20% last year.
Global Trends and Consumer Behavior
"In China in particular we were really driven by the growth in Gen Z, which we had called out in the previous quarter, but really accelerated as we came into the peak of outerwear and scarf season," Schulman said on a call with journalists.
The company's shares, which gained about 29% in 2025, were up 4.4% by 0940 GMT.
CHINA MARKETING EFFORTS APPEAL TO GEN Z
Burberry's comparable store sales rose 3% in the three months to December 27, beating analysts' expectation of 2% growth, according to a company-compiled consensus.
Sales in China rose 6% on a comparable basis as the brand continued its recovery in the crucial luxury market, led by "double-digit" growth in sales to Gen Z customers.
Burberry has staged new marketing efforts in China including a branded ice rink with an outerwear and scarf store in a mall in Beijing, and a pop-up shop on a ski slope in Chongli, complete with a ski lift wrapped in Burberry check.
"We've increased localisation of the storytelling and we've introduced new influencers and brand ambassadors (in China)," said Schulman.
Burberry launched a campaign ahead of Chinese Lunar New Year to mark the Year of the Horse, an opportunity for the brand whose logo is an equestrian knight on horseback.
MARKDOWN PERIOD SHORTER AND SHALLOWER
J.P. Morgan analysts said Burberry's update could be received positively by investors in the wider luxury sector, "providing relief on the state of the luxury consumer, in China in particular."
Luxury brands have been struggling for the past two years as consumers slashed spending on handbags and designer clothes, driving sales down across the industry after a post-pandemic boom.
Beyond China, Schulman said Burberry was attracting more younger shoppers globally, particularly to its scarves.
Overall, the company said its markdown period was shorter and "shallower" than last year, with more customers willing to pay full price.
"Traffic (in stores) is still quite challenging everywhere, but we are really, really encouraged by what we're seeing in terms of conversion - strong conversion everywhere, so customers coming in and certainly liking what they're seeing," said Burberry's chief financial officer Kate Ferry on a call with analysts.
Burberry has taken several steps to lure shoppers back, including tightening the link between design decisions and commercial teams, and holiday campaigns with celebrities such as British actor Olivia Colman, who starred as Queen Elizabeth II in "The Crown."
Burberry said it expects full-year adjusted operating profit to be in line with the consensus forecast of 149 million pounds ($200 million).
($1 = 0.7442 pounds)
(Reporting by Pushkala Aripaka in Bengaluru and Helen Reid in London. Editing by Mark Potter and Elaine Hardcastle)
