Burberry’s share price jumps as tariff war cools

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Retail Reporter

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Burberry's share price has fallen by a third in the last year
Burberry surged back to profit and met revenue expectations

Burberry’s share price jumped this morning after news of a US-China tariff deal boosted luxury stocks across the world.

The luxury giant’s share price rose more than six per cent in early trades. It has risen nearly 20 per cent in the last month.

The boost, which comes just ahead of Burberry’s yearly results on Wednesday, follows gains for LVMH, Moncler and Kering on the Euronext exchange.

LVMH’s share price has risen by more than seven per cent, while Hermes rose by 4.4 per cent and Kering rose by 6.4 per cent.

Luxury stocks took a beating in the wake of US President Donald Trump’s ‘Liberation Day’ on April 2, with concerns that lower growth in China would curb luxury’s budding recovery.

Chinese luxury-goods sales fell around 20 per cent in 2024, according to a Bain report, one of two key drivers for the slowdown in luxury goods. The other was a contraction in middle-class aspirational European demand.

Burberry’s Asia exposure

Bernstein analyst Luca Solca cut his yearly growth forecast for the luxury-goods sector in the wake of the tariffs, seeing growth contracting by two per cent year over year compared with a previous projection for five per cent growth.

This morning, however, the US and China agreed to slash tariffs on each other.

US trade representative Jamieson Greer told reporters in Geneva that so-called reciprocal tariffs were now at 10 per cent each.

That means the US is reducing its 145 per cent tariff to 30 per cent on Chinese goods, with a 20 per cent tariff still in effect from previous administrations.

China agreed to reduce its 125 per cent retaliatory tariffs to 10 per cent on US goods.

It’s very good news for Burberry, which is in the midst of a wide-ranging turnaround plan aiming to revive the retailer after multiple years of decline.

The British brand has significant exposure to shoppers in Asia, and has been growing its sales in the US amid the popularity of its staple styles, including trench coats and scarves.

RBC analysts previously estimated an “elevated tariff impact” for Burberry due its sourcing mix, which is the combination of countries and suppliers used to produce the luxury brand’s goods.

Burberry will report its full-year results on May 14. Analysts think the company will report an operating loss of about £7m for the year to March 2025 – but eke out a profit of £11m on an adjusted basis.