Burberry suspends dividend after significant drop in sales and profits

From Morningstar: 2024-07-19 05:25:00

Burberry, the British luxury brand, has suspended its dividend after shares dropped by over 15% in the last five days and almost 65% in the last year. This comes amidst a wider contraction in luxury spending, with sales dropping in Asia Pacific, mainland China, and the Americas.

Morningstar adjusted its fair value estimate for Burberry shares to £13.30 from £15.70 due to the company’s disappointing profit warning. The luxury retailer has seen a significant decrease in sales, with a 23% drop in the Asia Pacific region and a 21% and 23% decrease in sales in mainland China and the Americas, respectively.

Burberry has experienced instability in its C-suite, with three chief executives over the past decade. The most recent CEO, Jonathan Akeroyd, will be replaced by Joshua Schulman, the former CEO of Coach and Jimmy Choo. Schulman is set to take over effective immediately.



Read more at Morningstar: Dividend Watch: Why Burberry Suspended its Dividend