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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CONSUMER DISCRETIONARY SECTOR
Burberry (BRBY LN) issued an unscheduled profit warning this morning. 3Q24 sales (3M to Dec-23) -4% lfl (ests were +1%) and FY24 operating profit guidance (12M to Mar-24) now in range of GBP410-460m. At 16-Nov-23 with 1H24 results, mgmt already guided to "bottom end" of then-consensus range of 552-668m. BBG consensus had moved down but only to GBP536m, so a big miss.
- Key slowdowns across the board... AsPac now only +3% (had been +18% at 1H24 but slowing fast), EMEIA -5% (was +10% at Oct-23) and Americas -15% (was -10% at Oct-23). Mgmt use terms like "challenging" and "slowing luxury backdrop". There's not much more detail but this is a meaningful slowdown across geographies.
- Burberry only has one meaningful credit instrument (ZO475855 Corp, rated Baa2[P]/NR/NR) which has traded sideways (OAS basis) since the more minor profit warning in November. The big peers are companies like Kering (KER FP, owner of Gucci) and LVMH (MC FP, owner of Luis Vuitton).
- KER and LVMH are both better-rated (A and AA- by S&P) but their debt has, similarly, traded sideways over the last quarter. Initial indications shows OASs widening, likely to be a brutal day for the equities, too.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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