A collection of operational points have put Burberry (LSE:BRBY) shares by means of the mill lately. It means somebody who invested 10 years in the past — again when the enterprise was nonetheless listed on the FTSE 100 — could be nursing a nasty loss.

Had an investor put £10,000 within the now-FTSE 250 enterprise on 14 Could 2015, they might now have £5,528 sitting of their funding account. That represents a lack of 44.7%.

Fortunately, a stream of dividends throughout that point (excluding pandemic-hit 2020) would have taken the sting off. For the final 10 years, Burberry has delivered a complete dividend of 408p per share.

This implies a £10k funding a decade in the past would have supplied a complete return of £7,841 or -21.6%.

However might the style large be about to show the nook and ship stable returns trying forward? Judging by Burberry’s share price surge on Wednesday (14 Could), the broader market suggests the reply may very well be ‘yes.’

One other poor replace

The FTSE 250 firm is at present up virtually 18% from Tuesday’s shut, at 975p per share. That is regardless of it reporting one other whopping gross sales drop for the final monetary yr (to March 2025).

At £2.5bn, revenues tanked 17% on a reported foundation, or 15% at fixed currencies. Comparable retailer gross sales plummeted throughout its areas, inflicting a 12% year-on-year fall at group stage.

Trading was particularly weak in Asia, the place corresponding gross sales dipped 16%.

As a consequence, adjusted working revenue tanked 94% at precise change charges and 88% at fixed currencies, to £26m. The enterprise additionally swung to a pre-tax lack of £66m from a £383m revenue the yr earlier than.

The corporate wasn’t precisely brimming with confidence for the present monetary yr, both. It said that “the present macroeconomic atmosphere has grow to be extra unsure in mild of geopolitical developments“.

It added that “we’re nonetheless within the early levels of our turnaround“, and that its focus for fiscal 2026 “will probably be to construct on the early progress we now have made in reigniting model need, as a key requisite to rising the topline“.

Burberry predicted that margins will enhance as plans to enhance productiveness and simplify the enterprise proceed.

Is it a purchase?

So why has the agency’s share price surged, then? It’s mainly down to better-than-expected gross sales in the direction of the yr’s finish, which traders imagine might present progress underneath its ‘Burberry Forward’ turnaround technique.

Comparable retailer gross sales dropped 6% within the fourth quarter, however this nonetheless beat forecasts by round 2%. The corporate hopes measures like emphasising the Britishness of its model; emphasising key outerwear strains; and accelerating value financial savings will get it again on monitor.

However Burberry has an extended solution to go earlier than it will possibly show any restoration is sustainable. And I really feel the optimism that’s despatched its share price by means of the roof is significantly untimely.

The luxurious items market stays underneath substantial strain as customers dial again spending. And whereas tariff speak has died down for now, any recent developments might hold buyers’ purse strings tightened. Burberry is particularly uncovered to worsening commerce wars as effectively given its enormous reliance on China.

On high of this, Burberry operates in an unforgiving trade the place competitors amongst superbrands is intense. I’ll need to see extra progress on the corporate’s model and product technique earlier than shopping for in.