Sector movers: Burberry warning takes down personal goods stocks
Tue 11 Sep 2012
LONDON (SHARECAST) - With shares in Burberry sinking by more than a fifth after a profit warning, the personal goods sector was steeply lower on Tuesday afternoon.
Shares were down around 21% after the iconic British fashion house said profits would be at the lower end of expectations this year. The firm is now taking steps to cut costs and maintain short-term profitability.
Burberry, which has 196 retail stores, 207 concessions, 48 outlet shops and 58 franchise stores worldwide, said that trading conditions were becoming more challenging with like-for-like sales flat in the second quarter.
While most brokers today reiterated their positive longer-term stances on the business today, they chose to downgrade their ratings on the stock, citing limited near-term visibility. Nomura, Seymour Pierce and Investec all cut their buy recommendations for the shares today to adopt a more cautious view.
Posh handbag maker Mulberry fell lower in sympathy, as the personal goods sector as a whole sank over nearly 18%.
Bucking the trend was SuperGroup, the AIM-listed owner of the Superdry clothing brand, which jumped over 8% after saying that group sales increased by 10% in the first quarter.
The firm said that while trading conditions remain volatile, it is confident of meeting its financial objectives.
Top performing sectors so far today
Tobacco 35,612.50 +1.48%
Beverages 12,459.22 +0.37%
Pharmaceuticals & Biotechnology 9,734.13 +0.34%
Banks 3,833.81 +0.33%
Oil Equipment, Services & Distribution 25,395.94 +0.33%
Bottom performing sectors so far today
Personal Goods 17,206.44 -17.77%
Support Services 5,092.20 -1.33%
General Retailers 1,832.20 -1.26%
Fixed Line Telecommunications 2,652.92 -1.16%
Media 4,559.44 -1.16%