Burberry, the British luxury brand, faces a challenging period as it exits the FTSE 100 due to a sharp decline in share price.
- Burberry’s shares have fallen by 50.8% over the past six months, prompting its demotion to the FTSE 250 index.
- The company experienced a significant 22% decline in revenue in the first quarter of the fiscal year.
- Jonathan Akeroyd, former CEO, highlighted the difficulty of executing plans in a slowing luxury market.
- Joshua Schulman has taken over as CEO following Akeroyd’s sudden departure.
Burberry has been removed from the FTSE 100 index, as confirmed by market operator FTSE Russell. This follows a dramatic 50.8% decrease in its share price over the last six months. Consequently, the company now sits within the FTSE 250 index. Over the past year, Burberry’s share price has plummeted by 71.5%, trading at 623p as of 4 September.
The company’s financial struggles are further exemplified by a 22% year-on-year decline in revenue, totalling £458 million for the quarter ending 29 June. Over the full 52-week period ending 30 March, revenue fell by 4% to £2.97 billion, accompanied by a substantial 34% drop in operating profit, which amounted to £418 million.
In May, former CEO Jonathan Akeroyd acknowledged the challenges posed by a slowing demand in the luxury sector. He stated, “Executing our plan against a backdrop of slowing luxury demand has been challenging.” Akeroyd’s tenure was cut short in July when he was replaced by Joshua Schulman, who stepped in as the new CEO.
Burberry is set to release its interim results for the 26-week period ending 28 September 2024 on 14 November 2024. This will provide further insights into the company’s financial health and future prospects.
Burberry’s challenges reflect broader issues in the luxury sector, requiring strategic adjustments under new leadership.
