Burberry (LSE: BRBY) posted full-year outcomes Wednesday (14 Might) and the share price jumped. On the time of writing it’s up 20% since market shut on the day earlier than the outcomes. Is the struggling style retailer heading again to its earlier heights?

In accordance with CEO Joshua Schulman, it’s all about “Burberry Forward, our strategic plan to reignite brand desire, improve our performance and drive long-term value creation.” However we’re not seeing outcomes on the backside line but, as the corporate recorded an earnings per share (EPS) lack of 21p. Adjusted working revenue was simply optimistic at £26m, however approach down from the £418m within the 2024 fiscal yr.

Even after scratching my head for a few days, the explanation for the renewed optimism eludes me.

The place’s the meat?

The quick outlook for the present yr doesn’t sound very upbeat, as “the present macroeconomic atmosphere has turn into extra unsure in mild of geopolitical developments.“

A value financial savings programme delivered £24m within the yr simply ended. And the board expects an extra £60m in financial savings by 2027, which is healthier than beforehand hoped. However we should always count on one-off prices to come up from the brand new plan of round £80m. And it feels like there’ll be fairly a couple of redundancies too.

The remainder of the restoration hopes appear to be pinned on a plan to “reset the brand storytelling, enhance visual merchandising in stores and online, and align product focus to our core categories.” And it’ll “broaden appeal,” and ship “a step change in efficiency.“

With out mentioning Burberry, I requested ChatGPT to recommend how a struggling style model would possibly clarify its turnaround plans. It urged “it’s important to communicate transparency, renewed vision, and a customer-first focus — all while maintaining brand style.” And it spoke of “changing direction,” “getting back to what matters” and issues like that.

Any similarities between the 2 units of selling methods are, I’m certain, coincidental.

What subsequent?

Nonetheless, the share price had been down greater than 65% from its 2023 excessive level earlier than the brand new outcomes enhance. After such ache, possibly buyers solely want some modest optimism to get excited once more.

And I reckon it might be a really poor transfer to put in writing off the worldwide energy of the resilient Burberry model. Regardless of the firm is definitely doing, and regardless of the numbers at present say, it’s one of the crucial widely-recognised world style manufacturers.

Forecasts don’t present a return to optimistic earnings till 2026. After which it could solely be a small one. In the event that they’re proper, we’d have to attend till 2027 for sufficient to get the Burberry price-to-earnings (P/E) ratio down to 22. Even that’s not clearly screaming low cost.

Nonetheless, the CEO is “more optimistic than ever that Burberry’s best days are ahead.” Burberry may positively be price contemplating for buyers with a long-term view and who share his optimism.

And I’d by no means rule out its possibilities of bouncing again. However till I see numbers I like, it’s not going to be one for me.