Burberry Group (LSE:BRBY) has been one of the worst-performing FTSE 100 shares in recent years. Down more than 50% since early 2023, the luxury fashion house even spent a year of purgatory in the FTSE 250 between 2024 and 2025.
Under CEO Joshua Schulman though, things are heading in the right direction. And investors have started to take notice, with the share price up 13% so far in November.
Do we have a lucrative FTSE 100 recovery story playing out before our eyes here? Let’s take a closer look.
The recovery is picking up pace
As a reminder, Burberry’s push to charge even higher prices under previous management ultimately backfired. The brand’s attempt to go further upmarket during a weakening global luxury market compounded the mistake. Burberry swung to a loss in 2024/25 and scrapped the dividend.
To boost sales and reignite the brand’s appeal, Schulman launched the Burberry Forward plan in November 2024. It aims to put British heritage back at the centre of the business, with a renewed focus on iconic items like trench coats and scarves.
Also, Burberry is offering products at different price points within each category, including entry-level. It’s not cheap and is still firmly in the luxury sector. But the strategy is working. Revenue for the six months to 26 September increased 6% to £1.1bn, with 4% like-for-like growth in retail sales. And there was a £54m operating profit, reversing an £18m loss.
Burberry achieved growth across key categories — Womenswear, Menswear, Childrenswear and Accessories — and positive retail sales everywhere except Europe, the Middle East, India, and Africa (EMEIA).
Of course, EMEIA is more like half the world than a region. But given what’s been going on in the Middle East (war) and parts of Europe (protests in France), a 2% decline in comparable retail sales isn’t that bad. There was particular strength in the Americas (+12%) and Greater China (+7%).
Finally, wholesale revenue grew 17% at constant currency, which Burberry said reflected “the confidence of our strategic partners in our brand and product offering“.
Some risks
Overall then, there’s a lot to like here. However, the recovery is fragile. The Middle East is on a knife-edge, while TV coverage of violent protests in European cities isn’t a great advertisement for tourism (a key driver of luxury demand).
Meanwhile, China remains problematic, with falling property prices and a youth unemployment crisis.
Another risk is a potential AI bubble. If global stock markets tank, this could erode wealth and dampen luxury spending among affluent consumers.
Finally, a forward price-to-earnings multiple of 24 suggests Burberry might already be priced for a recovery. If growth disappoints, the stock could fall back sharply.
Top turnaround stock?
Despite the challenging backdrop, I still rate Burberry as one of the best FTSE 100 recovery shares to consider. The company has arrested the sales decline, restored profitability, and is rebuilding margins.
Crucially, the brand is appealing to more aspirational luxury consumers again. Indeed, Schulman says the firm has “a unique opportunity to win in this current luxury environment by providing enduring value at every price tier“.
Note the tiers: a cashmere scarf at £450, heritage trench coat at £1,900, or a cashmere coat at just over £3,200. A better-run and growing Burberry selling products at these prices should do well over time.
Should you invest £5,000 in Burberry Group Plc right now?
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Ben McPoland has no position in any of the companies mentioned.
