CEO Joshua Schulman''s arrival in mid-2024 marked a shift in Burberry''s strategy back to Heritage (from Fashion). Strong cal4Q (3Q25) trends and the increased commerciality demonstrated by the new AW25 collection show this strategy could pay off. We upgrade to Outperform. A return to roots: Heritage renaissance? In the last 20 years, success often came from Heritage products. And 3Q (ending Dec-24) trends in Outerwear (+lsd) and Scarves (+mid-teens) indicate that a Heritage focus could work. Overall Retail LFL improved from -20% to -4% (-7% excl. inventory exit boost), notable progress. Burberry was even flat with the key Chinese cluster (vs c-7% for sector in cal4Q). The It''s Always Burberry Weather campaigns got great press, some scarcity is now back in the model (red scarf sold out), our social media tracker shows improvements and the latest collection presented in Feb showcased the ''back to roots'' strategy with an emphasis on British heritage. What matters most to us is that the new collection confirms the move towards more commerciality (initiated by previous CEO). Designer Daniel Lee seems ready to align with management, Merchandising and Communication teams. Margin upside: top line can soon accelerate to at least in line with the sector Despite much less promo and the end of the festive season, we see 4Q25 (cal1Q25) Retail comps improving to -2% (from -7% underlying) vs consensus -3%. FY March 25 margins (to be released 14 May) should be a non-event (slightly positive). For FY March 26e EPS, we are 22% above consensus, with 7% OSG and 8.2% EBIT margin. We upgrade to Outperform (from Neutral) with a new TP of GBp1,350 Shares are down c25% from YTD peak reached on 6 Feb after strong cal4Q (3Q25). Burberry is trading on only 1.5x 12m EV/Sales excl. leases, a c30% discount to history and well below the sector at 4.3x trading at a c50% premium to history. With confirmed commerciality improvements and significantly higher estimates vs consensus, we...