Burberry Group PLC (LSE:BRBY) shares plunged 14% after the fashion house parted ways with chief executive Jonathan Akeroyd with immediate effect and announced that it had paused its dividend as it expects to report a loss for the first half of the year.
The FTSE 100-listed group has appointed former Michael Kors and Jimmy Choo boss Joshua Schulman as its new CEO, starting later this week.
Sales in its first quarter to 29 June were down 21% on a comparable store basis.
Group chair Gerry Murphy said: "Our Q1 FY25 performance is disappointing. We moved quickly with our creative transition in a luxury market that is proving more challenging than expected."
Weakness seen at the time of its final results has "deepened" and if these trends persist through its second quarter an operating loss is expected for the first half, he said.
"In light of current trading, we have decided to suspend dividend payments in respect of FY25."
Actions are being taken to "rebalance" the produce offer and to cut costs, which Murphy said were hoped to "start to deliver an improvement in our second half and to strengthen our competitive position and underpin long-term growth".
The shares fell over 14% to 759.40p on Monday morning.
CEO change
Akeroyd joined in 2021 with a turnaround brief but has paid the price for a sharp fall in profits last year amid wider struggles for luxury brands.
Murphy said Akeroyd "has set out a clear strategy for growth that we will build on".
He added that Schulman "is a proven leader with an outstanding record of building global luxury brands and driving profitable growth. He has a strong understanding of our brand and shares our ambition to build on Burberry's unique creative heritage."
The American national was CEO of Michael Kors between 2021 and 2022, and brand president at Coach, following a five-year stint at the Neiman Marcus Group.
London fashion followers may know him from his time as CEO of Jimmy Choo between 2007 and 2012 before it was bought by Michael Kors in 2017.
Schulman said he was "deeply honoured" to join Burberry and that the brand's "original purpose to protect people from the weather is more relevant than ever".
** Update: Adds share price **