Category Market News

FTSE Close: Burberry plunges as luxury demand slows

Burberry plunges over 10% as luxury demand slows, weighing on FTSE 100 despite M&A excitement in AIM stocks Hotel Chocolat and City Pub.
Mark Rogers

Mark Rogers

Shares in luxury fashion brand Burberry plunged 11% on Thursday, the worst FTSE 100 performer, after the company warned that weaker luxury demand is impacting current trading.

Burberry’s gloom weighed on the wider FTSE 100 index, which fell 75.94 points, or 1%, to 7,410.97. Shell and BP tracked lower oil prices, closing down 3% and 2.8% respectively. Hargreaves Lansdown fell 5.8%, as the fund supermarket also went ex-dividend.

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Burberry said in a trading update that pre-tax profit fell 13% to £219 million in the six months to September 30. Adjusted operating profit declined 6.3% to £223 million, as adjusted operating margin narrowed to 15.9% from 19.5%. Revenue grew 3.8% to £1.40 billion but Burberry warned it is “unlikely to achieve our previously stated revenue guidance for FY24” amid slowing luxury demand.

There was some M&A excitement among AIM stocks. Hotel Chocolat shares more than doubled after agreeing to a £534 million cash takeover by Mars. City Pub Group jumped 37% on news of a £162 million recommended offer from Young & Co’s Brewery.

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