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Burberry shares slump 12.5% after Chinese slowdown warning -- business live

Discussion in 'Market News' started by Lily, Oct 15, 2015.

  1. Lily

    Lily Forum Member

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    All the latest economic and financial news, as fashion firm Burberry warns that demand for luxury goods is fading, particularly in China


    8.47am BST

    Burberry’s shares are on track for its biggest one-day fall since 2012:

    And there goes @Burberry , down the most in 3years!! Sfter China hits sales & they downgrade profit forecast pic.twitter.com/xE7Vyv42N1

    8.44am BST

    Burberry reports falling sales in China and describes market for its luxury wares as "challenging". The company's share price is down 11%.

    8.35am BST

    Burberry are briefing the media now on a conference call.

    Carol Fairweather, chief financial officer, reveals that comparable sales have fallen by 4% in the second quarter of the financial year (July-September), after growing 6% in the first quarter (April-June).

    8.26am BST

    Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, points out that Burberry’s problems began in Hong Kong, where sales fell by over 10% in the April-June quarter:

    “The news from Burberry is chequered once more, with an underwhelming second quarter not quite sufficient to take the shine from a reasonable first half of the year. However, as can be seen from the share price reaction, the market is in no mood to take prisoners at present.

    As with markets in general, the company is naming China as the main culprit, where sales are subject to increasing pressure, washing out also to Hong Kong, where further deceleration is being seen. In addition, the general economic malaise has resulted in uneven demand in the US from both domestic and tourist customers alike.

    8.15am BST

    Today’s selloff has sent Burberry’s shares down to their lowest level since April 2013:

    8.08am BST

    Boom! Burberry’s shares have fallen by over 10% , as investors give their verdict to today’s disappointing sales figures.

    Shares lost 145p to £12.74, wiping around £600m off the company’s value.

    8.06am BST

    The FTSE 100 has jumped by 40 points at the start of trading, driven by hopes that US interest rates will remain at their current lows until the end of the year (at least).

    But Burberry’s shares haven’t traded yet, suggesting market makers are struggling to match bids.....

    7.55am BST

    Retail analyst Nick Bubb doesn’t like the look of Burberry’s figures.

    Here’s his first take:

    The worry beforehand was that group performance would be hit by the slowdown in China and the comment that “For full-year 2016, we expect that adjusted profits before tax will be broadly in line with the average of those analysts who have recently downgraded forecasts” is ominous.

    The news that first half retail sales were only up by 2% underlying, “in an increasingly challenging environment for luxury customers”, implying that Q2 sales were down....

    When's a profit warning not a profit warning? When it's Burberry... @NickBubb1 is calling it one. V strange wording http://t.co/tR8hWjC5rB

    7.37am BST

    China’s slowing economy has hit Burberry, and forced the company to speed up its cost-cutting plans.

    “The external environment became more challenging during the half, affecting luxury consumer demand in some of our key markets. In response, we have intensified our focus on driving sales and productivity, while taking swift action on discretionary costs.

    While mindful of this external volatility, our plans for the festive season position us well to return to a more positive sales trend in the all-important second half. Looking further ahead, we maintain our focus on - and confidence in - the long-term growth opportunities for our business across channels, regions and product categories.”

    BIG miss @Burberry results...cut FY profit £10 vs £20m, u/lying retail sales +2%, ests +8%. Asia-Pac slows, China particularly challenging

    Ouch from Burberry -sales up only 2% on "increasingly challenging environment for luxury"

    7.15am BST

    Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

    Stock markets are expected to rally today, as investors decide that the Federal Reserve is increasingly unlikely to raise interest in 2015.

    Our European opening calls: $FTSE 6299 up 29 $DAX 9976 up 61 $CAC 4642 up 33 $IBEX 10089 up 51 $MIB 21967 up 129

    Stocks rallying because of delay in #Fed rate hike. But the delay is because U.S. economy is bordering on recession. Strange time to rally.

    Continue reading...
     

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