After issuing a profit warning and replacing its CEO, Burberry's shares plummet by 15%.

• If the recent trading slowdown continues, Burberry anticipates reporting an operating loss in the first half of this year and full-year operating profit below current consensus expectations.
• The price of shares in the 168-year-old British luxury company had decreased by 15.4% at 9:54 a.m. London time.
• The company suspended its dividend and appointed Joshua Schulman, who was previously with Michael Kors and Coach, as its new CEO, with Jonathan Akeroyd stepping down "with immediate effect."

On Monday, the stock price of the company dropped more than 15% in early trading after it announced a profit warning, replaced its CEO, and suspended its dividend following a poor first-quarter performance.

If the recent trading slowdown persists, the 168-year-old British luxury giant anticipates reporting an operating loss in the first half of this year and a full-year operating profit below current expectations.

The company suspended its dividend and appointed Joshua Schulman, who previously led Michael Kors and Coach, as its new CEO. Jonathan Akeroyd is stepping down "with immediate effect by mutual agreement with the Board," the company announced.

Shares were 15.4% lower at 9:54 a.m. London time.

"Gerry Murphy, Burberry Chair, stated in a trading update that the weakness highlighted prior to FY25 has intensified and if the current trend continues through Q2, the company expects to report an operating loss for the first half, describing the first-quarter performance as "disappointing.""

"Due to current trading conditions, we have decided to temporarily halt dividend payments for FY25. We anticipate that the measures we are implementing, such as cost reduction, will begin to improve our financial performance in the second half and enhance our competitive position, thereby supporting long-term growth."

In the 12 weeks to June 29, Burberry reported a 21% decline in comparable store sales, with retail revenue totaling £458 million for the period. On a regional basis, sales fell 16% in EMEIA (Europe, the Middle East, India and Africa), and 23% in both Asia Pacific and the Americas.

FY24 guidance for the company was lowered in January, and RBC analysts Piral Dadhania and Richard Chamberlain stated that the results were "incrementally worse."

Soft brand momentum for the Burberry brand is indicated by current trading trends, which must be addressed promptly to prevent any further market share losses, according to their view.

Across its major markets, the company is facing a decline in luxury demand due to a cost-of-living crisis affecting its European and U.S. customers, and economic concerns impacting Asian consumers.

Burberry stated that the luxury demand is slowing down due to macroeconomic uncertainty, which is affecting all key regions and contributing to the sector's slowdown.

The company announced plans to reconnect with its core customer base by rebalancing its products to offer a broader everyday luxury range, refining its brand communications, refreshing its website, and delivering cost savings.

For several years, the company has been striving to elevate its brand image by focusing on high-end items such as trench coats, bags, and the distinctive "Burberry check" pattern.

In 2021, Akeroyd, who had previously worked at Versace and Alexander McQueen, assumed the role of CEO at the company, succeeding Marco Gobbetti who had launched a five-year turnaround plan in 2017.