Burberry: Firm axes dividend as group slumps to loss
Burberry has slumped to a loss and axed its dividend for the first half of its financial year as sales at the British luxury house plunged.
In its interim results for the 26 weeks to 28 September, the group reported an operating loss of £53m, down from a profit of £223m in the same period last year.
Burberry also said it would not pay a dividend for the period. Last year, the company declared an interim payout of 18.3p per share.
Following its results this morning, its shares rose sharply by up to 16 per cent, before lowering slightly to around 13 per cent.
‘Burberry Forward’
Alongside the results, the company announced a new strategic plan, ‘Burberry Forward’ designed to “reignite brand desire, improve our performance and drive long-term value creation.”
The company said it would double down on Burberry’s strengths as a British brand and build on the group’s foundations.
Burberry said it has already started to move ahead with the strategic plan, appointing new leaders across its marketing, product merchandising and Americas divisions and laying out plans to remove £40m of costs. The company added that it had also accelerated plans to reduce excess store inventory.
However, despite these early changes, Burberry said it was too early to tell if performance in the second half would offset the red ink for the first half of the year.
Joshua Schulman, Burberry’s new CEO said: “My first few months have reaffirmed my belief that Burberry is an extraordinary luxury brand, quintessentially British, equal parts heritage and innovation.
“Our recent underperformance has stemmed from several factors, including inconsistent brand execution and a lack of focus on our core outerwear category and our core customer segments.
He added: “Today, we are acting with urgency to course correct, stabilise the business and position Burberry for a return to sustainable, profitable growth. We have a powerful brand with broad appeal among luxury customers, authority in the outerwear and scarf categories which have remained resilient through this period, and a strong presence in all key luxury markets.
“Now, we have a clear framework to reignite brand desire, improve our performance and drive long-term value creation. Building on our strong foundations, I am confident that Burberry’s best days are ahead.”