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Burberry's share price has fallen sharply after it issued a profit warning, replaced its CEO and suspended its dividend.

AInvestMonday, Jul 15, 2024 4:20 am ET
1min read

The British luxury goods giant Burberry saw its shares jump more than 11% in early trading on Monday after the company reported disappointing first-quarter results and issued a profit warning, announcing a change in CEO and a dividend suspension.

Burberry said that if recent trading weakness continues, it expects to report a first-half operating loss this year and full-year operating profit to fall short of current expectations.

The company also suspended its dividend and appointed Joshua Schulman, who has led Michael Kors and Coach, as its new chief executive. The company added that current CEO Jonathan Akeroyd “has agreed with the board to step down immediately.”

Burberry chairman Anthony Hobbs said: “The softness we have highlighted for FY25 has deepened, and if the current trend continues into Q2, we expect a first-half operating loss.” He described the company’s first-quarter performance as “disappointing.”

“Given the current trading environment, we have decided to suspend the dividend for FY25 … We expect the actions we are taking, including cost savings, to start to improve in H2 and strengthen our competitive position and underpin long-term growth.”

Burberry said that like-for-like sales fell 21% in the 12 weeks to June 29th, with retail revenues of £458m. Regionally, sales were down 16% in Emeia (Europe, Middle East, India and Africa) and 23% in Asia Pacific and Americas.

Burberry said it hoped to “reconnect with our core client base” and planned to focus on rebalancing its product offering, including “a broader range of everyday luxury”, improved brand communications, website updates and cost savings.

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