Key Moments:
- The FTSE 100 index declined 0.25%, marking an end to its recent rally, while the FTSE 250 edged 0.20% lower.
- Burberry beat expectations with a surprise profit and announced job cuts of up to 1,700. Its stock rose 8% to £893.
- Imperial Brands CEO Stefan Bomhard confirmed plans to retire, and the company’s shares tumbled more than 7%, ranking lowest on the FTSE 100.
UK Shares Decline
UK equities edged lower at the market open on Wednesday, breaking a recent upward trend as investors assessed fresh corporate earnings reports and announcements. The FTSE 100 index slipped 0.25%, while the broader FTSE 250 shed 0.20%.
Among the companies in focus was Burberry, which revealed a significant cost-saving initiative that includes plans to eliminate up to 1,700 positions. The announcement came alongside the disclosure of the company’s fourth-quarter operating profit, which hit £26 million ($34.55 million). The figure exceeded expectations despite marking a notable decline from the £418 million reported last year. In addition, Burberry also expects to gain an additional £60 million in cost savings by the financial year set to end in March 2027.
Fourth-quarter retail like-for-like sales dropped 6%, better than the anticipated 8% decline, while EBIT for the second half came in at £67 million, outpacing the predicted £52 million and surpassing UBS’s estimate of £40 million. UBS analysts commented that despite a sharp decline in share price from its February high, the company’s better-than-expected performance today, with only a slight 2ppt sequential slowdown in LFL and a profit beat, would likely be welcomed. They believe this could lead to renewed excitement surrounding Burberry’s continuing turnaround.
Wednesday saw Burberry’s shares bounce substantially on its latest announcements. The stock price jumped 8%, hitting £893.
In contrast, Imperial Brands, a major player in the UK’s tobacco sector, suffered a share price decline of over 7% on news of CEO Stefan Bomhard’s plans to retire after his five-year tenure. Bomhard is known for spearheading a strategic emphasis on core tobacco operations and bolstering returns for shareholders.
Alongside the leadership transition, Imperial set its financial objectives for fiscal years 2026 through 2030. The company aims to achieve adjusted operating profit growth between 3% and 5%, signaling its long-term commitment to steady performance.
It is also worth noting that while US equity markets have been buoyed by the Trump administration’s latest trade agreements, the FTSE 100 has not mirrored that momentum, according to Hargreaves Lansdown analyst Susannah Streeter. Concerns over prolonged higher interest rates in the UK, Streeter argued, may be weighing on sentiment.
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