Burberry suspends dividend payments following slump in first quarter sales
Luxury brand Burberry has suspended dividend payments for its current financial year as it issued a profit warning after a “disappointing” first quarter performance.
The brand has also announced that its chief executive officer Jonathan Akeroyd has stepped down and been replaced by Joshua Schulman.
In the 13 weeks to 29 June, the brand’s retail sales dropped by 22% to £458 million while comparable store sales declined by 23%, 16% and 23% respectively in Asia Pacific, EMEIA and the Americas.
Burberry said it has been struggling against slowing luxury demand across all of its key markets. However, sales in Japan continued to grow due to the country benefiting from strong tourism spend mainly from Chinese shoppers.
Gerry Murphy, chair of Burberry, said: “Our Q1 FY25 performance is disappointing. We moved quickly with our creative transition in a luxury market that is proving more challenging than expected.
“The weakness we highlighted coming into FY25 has deepened and if the current trend persists through our Q2, we expect to report an operating loss for our first half.”
Rebalance of offering
Burberry is taking action to rebalance its offering to make it “more familiar” to it core customers whilst still delivering newness. This will include refining its marketing communications and the launch of a new worldwide outerwear campaign in October.
The brand will also be driving operational efficiencies and working to deliver cost savings to offset the impact of inflation.
Burberry said it expects to start seeing an improvement in its performance in the second half of its financial year.
