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Supergroup tumbles on profit warning; FTSE edges up
by Max Julius on Feb 08, 2012 at 09:10
Shares in Supergroup (SGP.L) slumped on Wednesday after the fashion company issued a profit warning in the wake of slowing sales growth, while the FTSE 100 gained amid hopes that Greece is finally about to secure a new rescue deal.
Supergroup lost 101p, or 14% to 599p, after the Superdry fashion brand owner revised down its full-year profit guidance towards the lower end of market expectations, near £50 million.
‘Retail sales during the quarter have been mixed, with a challenging last three weeks of January,’ said Julian Dunkerton, chief executive, of the 13 weeks to 29 January.
The FTSE 250 company reported a ‘solid’ Christmas trading period, which saw a rise in sales of 9.3% at stores open for at least a year, but added that there had been a slowdown in the last three weeks of January.
‘We still think a double-digit earnings growth profile over the next two years is still very plausible, although we maintain it will take several more quarters of flawless execution for Supergroup to regain its previous premium valuation rating to the retail sector average,’ said Peter Smedley, analyst at Charles Stanley. ‘Today’s profit warning does not provide that.’
Italian, Spanish borrowing costs drop
The UK index of blue-chip shares improved 0.26%, or 16 points, to 5,906 and the All Share index gained 0.23%, or seven points, to 3,049. See the FTSE’s performance and the index’s top winners and losers.
The gains came as Greek parties were set to seek a reform deal in return for a fresh €130 billion (£108 billion) international bailout to avoid a messy default. A series of delays forced by recalcitrant Greek politicians has pushed some European Union leaders to warn that the eurozone would survive without the debt-ridden nation.
‘The financial markets appear to be increasingly turning a blind eye to developments in Greece assuming that further external aid will soon be transferred to Greece helping to avoid a more disorderly default in the near-term which could trigger a renewed spike in financial market instability,’ said Lee Hardman, currency economist at Bank of Tokyo Mitsubishi UFJ.
But he continued: ‘Recent developments regarding Greece leave us far less sanguine over the downside risks ahead than the market at present.’
Other stock markets in Europe also advanced, led by financial stocks – with Germany’s Commerzbank up 9.6% at €2.14. The German DAX index hardened 0.68% to 6,800, France's CAC 40 index rose 0.52% to 3,429, and the FTSEurofirst 300 index of top European shares was 0.5% higher at 1,078.
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