Burberry shares have nosedived in early deals this morning after the luxury retailer cancelled its dividend for the rest of the year and announced the departure of its chief executive.
The company announced the changes alongside a miserable trading update, which said the group expected to report an overall revenue decline of 25 per cent for the first half of the year.
Burberry shares opened down 12 per cent in early deals before paring some losses to trade down nine per cent. The stock has lost 42 per cent year-to-date and 62 per cent over the past 12 months.
Burberry said the company would “report an operating loss for the first half” if current trends continued, with the fashion house canning a planned dividend.
Jonathan Akeroyd will also step down as CEO “with immediate affect” and be replaced by the American Joshua Schulman, the former boss of Michael Kors and Coach.
Akeroyd’s appointment came just two years ago, poached from Versace.
Gerry Murphy, the chair of Burberry, described the results as “disappointing” and cited a “more challenging than expected” luxury market.
The company said all regions outside of Japan saw a decline in comparable store sales. Sales in the South Asia Pacific region slumped 38 per cent, while sales in South Korea fell 26 per cent and sales in Mainland China declined 21 per cent.
“The weakness we highlighted coming into 2025 has deepened, and if the current trend persists through our Q2, we expect to report an operating loss for our first half”, Murphy said.
“In light of current trading, we have decided to suspend dividend payments in respect of 2025.
“We are taking decisive action to rebalance our offer to be more familiar to Burberry’s core customers whilst delivering relevant newness.
“We expect the actions we are taking, including cost savings, to start to deliver an improvement in our second half and to strengthen our competitive position and underpin long-term growth,” he continued.
Burberry has suffered a string of poor profit updates in the last few years. The company’s revenue sipped below £3bn in the last financial year, while its pre-tax profits were slashed from £634m to £383m.
The then-chief executive officer, Jonathan Akeroyd, missed out on his bonus payment for that year.