Pedestrians walk past the Burberry Group Plc store in Hong Kong’s Causeway Bay shopping district (left).
Xiumei Oleros | Bloomberg | Getty Images
shares Burberry The company plunged more than 15% in early trading on Monday after disappointing first-quarter results prompted the company to issue a profit warning, replace its chief executive and cut its dividend.
The 168-year-old British luxury goods giant said it expects to post an operating loss in the first half of this year and full-year operating profit below current consensus if the recent slowdown in trading continues.
The company also suspended its dividend and named Joshua Schulman (who previously led Michael Kors and Coach) as its new chief executive. The company added that Jonathan Akeroyd would resign “with immediate effect by mutual agreement with the board”.
The stock fell 15.4% as of 9:54 a.m. London time.
Describing the company’s first-quarter results in a trading update, Burberry chairman Gerry Murphy said: “The weakness we highlighted in financial year 2025 has deepened, and if current trends continue into the second quarter, we expect to see further declines in the first half of the year.” Operating loss.” was “disappointing.”
“Given current trading conditions, we have decided to suspend the payment of our dividend for FY25… We expect the actions we are taking, including cost savings, will begin to deliver improvements in the second half of the year and strengthen our competitive position and underpin long-term growth.
Burberry said same-store sales fell 21% in the 12 weeks to June 29, with retail revenue for the same period being £458 million. From a regional perspective, sales in EMEIA (Europe, the Middle East, India and Africa) fell by 16%, and sales in Asia Pacific and the Americas fell by 23%.
RBC analysts Piral Dadhania and Richard Chamberlain said the results “compared to already lowered guidance for fiscal 2024 (January). It’s getting worse.”
They added: “Current trading trends point to weak brand momentum for the Burberry brand and we believe this issue needs to be resolved quickly so that Burberry can contain any further market share losses.”
The company has been battling falling demand for luxury goods in key markets, with a cost-of-living crisis affecting its European and U.S. customers and economic worries plaguing Asian consumers.
Burberry added: “We operate against a backdrop of slowing demand for luxury goods, with all major regions affected by macroeconomic uncertainty and resulting in a slowdown in the sector.”
Outlining its desire to “reconnect with our core customer base,” the company said it planned to focus on rebalancing its offerings “to include a broader range of everyday luxury products,” refining its brand communications, updating its website, and making cost savings.
The company, known for its trench coats, bags and “Burberry check,” has been trying to make its brand more premium for years.
Akeroyd, who has worked at Versace and Alexander McQueen, accepted the challenge in 2021, succeeding predecessor Marco Gobbetti, who launched a five-year turnaround plan in 2017.
