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British luxury fashion brand Burberry (OTCPK:BURBY) on Monday named Michael Kors boss Joshua Schulman as its new chief executive officer and said it expects to post an operating loss in the first half after a “disappointing” first quarter performance.
Burberry (OTCPK:BURBY) also scrapped its dividend payment for this year and reported a 21% fall in comparable store sales in the 13 weeks to June 29.
“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,” Gerry Murphy, Chair of Burberry (OTCPK:BURBY) said in a statement.
“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,” Murphy added.
The company expects wholesale revenue to decline by around 25% in H1 and decline by around 30% for the full year, and also forecast a currency headwind of c.£55M to revenue and c.£20M to operating profit in FY25.
The embattled luxury retailer said it is operating against a backdrop of slowing luxury demand with all key regions impacted by macroeconomic uncertainty, contributing to the sector slowdown.
Burberry’s (OTCPK:BURBY) shares on the LSE fell more than 13% in early trading.