Burberry shares tank as CEO ousted, profit warning issued, divi axed

Former Michael Kors boss Joshua Schulman was named as new CEO, replacing Jonathan Akeroyd who was leaving with immediate effect by mutual agreement, with the former Versace chief just two years into the job.

The company said retail sales in the 13 weeks to June 29 fell by 22% to £458m, citing "slowing luxury demand with all key regions impacted by macroeconomic uncertainty and contributing to the sector slowdown".

“The slowdown in trading we experienced in the first quarter of full-year 2025 continued into July. If this trend were to continue through the current quarter, we would expect to report a first-half operating loss and full-year operating profit to be below current consensus,” Burberry said on Monday.

In the Asia Pacific region sales were down by 23%, with mainland China down 21%, South Asia Pacific 38% and South Korea 26%. Only Japan showed growth with a rise of 6%.

However, Burberry's woes didn't stop there, as the Americas decreased 23%, while Europe, Middle East and Africa fell 16% with local spend deteriorating versus last quarter. Tourists accounted for just over half of retail revenues but declined by a high single digit percentage.

The fashion brand said that under Schulman it would now focus on “more of the timeless, classic attributes that Burberry is known for”. That would include an outerwear campaign to be launched in October, “building on the established resilience of our house icons”.

“We believe there is an opportunity to reconnect with our core customer base and capitalise on the enduring appeal of Burberry’s iconic products and brand while delivering relevant newness,” the company said.

Burberry chair Gerry Murphy said that would mean shifting focus back to its well-known trench coats and scarves, known for their distinctive check pattern.

“We moved quickly with our creative transition in a luxury market that is proving more challenging than expected,” he said. “If the current trend persists through our Q2, we expect to report an operating loss for our first half.”

“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.”

Aarin Chiekrie, equity analyst at Hargreaves Lansdown said: "There’s a lot of work to be done to make up for years of underinvestment in the brand. Unsurprisingly, the shares have taken a big hit in early trading. The new boss has a lot of work to do to steady the ship and prove to investors that calmer seas lie ahead.”

Reporting by Frank Prenesti for Sharecast.com