LONDON (dpa-AFX) - Shares of Burberry Group Plc (BRBY.L) plunged nearly 17 percent on the London Stock Exchange after the British luxury brand announced weak first-quarter retail sales and comparable store sales, warned about its outlook, and also decided to suspend dividend payments.
Burberry also separately announced that Chief Executive Officer Jonathan Akeroyd has resigned with immediate effect by mutual agreement with the Board. The company appointed Joshua Schulman as Chief Executive Officer and Executive Director, replacing Akeroyd.
The new CEO will join Burberry on July 17 and be based at the Company's headquarters in London. He will lead the Executive Committee and report to Burberry Chair Gerry Murphy and the Board of Directors.
Schulman was previously CEO of American fashion brands Michael Kors and Coach where he also served as Brand President. Prior to this, at Neiman Marcus Group, he was President of Bergdorf Goodman for five years, and was also CEO of Jimmy Choo in London. He also worked with Yves Saint Laurent and Gucci.
Regarding the first-quarter results, Murphy said, 'Our first quarter performance is disappointing. The weakness we highlighted coming into fiscal 2025 has deepened and if the current trend persists through our second quarter, we expect to report an operating loss for our first half. In light of current trading, we have decided to suspend dividend payments in respect of fiscal 2025.'
In the first quarter, retail revenue of 458 million pounds fell 22 percent from 589 million pounds last year. Retail revenues were down 20 percent at constant currency revenues.
Comparable store sales were down 21 percent for the period, compared to an 18 percent rise in the prior year.
Among regions, comparable store sales fell 23 percent in Americas, 16 percent in EMEIA and 23 percent in Asia Pacific. Mainland China sales fell 21 percent, South Asia Pacific sales plunged 38 percent, and South Korea sales dropped 26 percent, while Japan sales grew 6 percent.
Looking ahead, the company projects that if the slowdown trend continues through the current quarter, it expects a first half operating loss, and fiscal 2025 operating profit to be below current consensus.
The Group anticipates wholesale revenue to decline by around 25 percent in first half and decline by around 30 percent for the full year.
The company said it expects the new actions, including cost savings, will start to deliver an improvement in second half and to strengthen our competitive position and underpin long-term growth.
In London, Burberry shares were trading at 736.60 pence, down 16.92 percent.
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