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FTSE 100 movers: Burberry, IAG in the red

(Sharecast News) - London's FTSE 100 was up 1% at 7,654.88 in afternoon trade on Friday. Luxury fashion group Burberry tumbled as it delivered a significant profit warning on the back of the well-cited slowdown in luxury demand that has rocked the industry over recent months.

The company now expects adjusted operating profit for the financial year to 30 March 2024 to be between £410m and £460m, well below the £552m to £668m range guided to at its interim results just two months ago.

Russ Mould, investment director at AJ Bell, said: "So much for the roaring twenties. The idea that wealthier individuals would completely brush off inflation and the cost-of-living crisis has been thrown in the bin. No sector is entirely immune from such pressures and over the past six months or so we've seen cracks appearing in the luxury goods sector as demand wanes.

"Burberry already flagged problems two months ago and now it says trading has seen further deceleration, meaning full-year results will miss expectations. The Americas and South Korea are the biggest problem areas for the group, judging by store sales trends.

"So, what can it do? Unlike your average fashion retailer, it is simply not the Burberry way to slash prices and hope bargains lure in shoppers. The luxury goods scene is about trying to make consumers want to have something exquisite and premium priced to give the illusion that it is only available to the elite. Discounting would tarnish the brand.

"Therefore, Burberry has no choice but to ride out the storm until the wealthier are feeling confident enough to splash the cash once more."

British Airways and Iberia owner IAG flew lower after Delta Airlines cut its guidance for 2024.

FTSE 100 - Risers

JD Sports Fashion (JD.) 115.10p 4.35% Rolls-Royce Holdings (RR.) 306.60p 3.23% Rightmove (RMV) 567.00p 3.13% Spirax-Sarco Engineering (SPX) 10,035.00p 3.03% Endeavour Mining (EDV) 1,462.00p 2.60% Fresnillo (FRES) 529.60p 2.32% Melrose Industries (MRO) 584.60p 2.24% BAE Systems (BA.) 1,189.00p 2.19% Legal & General Group (LGEN) 253.10p 2.18% Diploma (DPLM) 3,398.00p 2.16%

FTSE 100 - Fallers

Burberry Group (BRBY) 1,260.00p -7.39% International Consolidated Airlines Group SA (CDI) (IAG) 145.50p -2.09% Informa (INF) 756.40p -1.20% Diageo (DGE) 2,785.00p -1.08% SSE (SSE) 1,791.50p -0.75% Centrica (CNA) 151.70p -0.43% Compass Group (CPG) 2,184.00p 0.00% Ocado Group (OCDO) 662.00p 0.09% Dechra Pharmaceuticals (DPH) 3,866.00p 0.10% HSBC Holdings (HSBA) 612.20p 0.13%

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