Ahrendts move overshadows Burberry figures

An impressive first-half revenue growth of £1.03 billion and a 14% year-on-year increase would under normal circumstances ensure a solid start to the trading day.

However news that Burberry's long-standing chief executive Angela Ahrendts is moving on has shaken investors, and in the first ten minutes of trading the shares have dropped by almost 5.5%. Ms Ahrendts will be replaced by chief creative officer Christopher Bailey. As Ms Ahrendts is moving on to a new role at Apple, it is hard for the City not to assess this as a move up for her and a loss for Burberry.

When higher-management are replaced from within it does help to ensure continuity in the company’s strategy and planning. The management switch will not take place until well into next year, and with such a long transfer period any hiccups should be avoided.

In comparison to many FTSE stocks, Burberry’s dividend yield of 1.83% is a little on the low side when you consider the average for the FTSE is 3.8%. But even with this morning’s drop in the share price, the company is still a healthy 22% higher this year.

Burberry Group plc (DFB) chart

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