Burberry shares hit six-year low

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Burberry's shares fell as much as 18.5% after the firm said profits would be at the lower end of expectations.

Burberry said "the current challenging environment" would prevent it from meeting market expectations in the second half of the financial year.

The upmarket clothing company said it had been particularly hard hit by a slowdown in the crucial US market.

The news briefly sent Burberry shares to a six-year low, although they later reversed some of their earlier losses.

Burberry's share price closed down 26.75 pence or 13.36% at 173.5p.

The company saw a 13% rise in revenue for the six months to 30 September to £539m.

"We continue to have nice positive like-for-like growth in our European and Asian markets, albeit it's very volatile and the daily swings are very significant," said Burberry's chief financial officer Stacey Cartwright.

Burberry forecasts that its profit margin will suffer because US retail outlets will place smaller wholesale orders for luxury goods.

In the first half of the year, luxury brands held up well despite the economic slowdown.

However, some of them have warned lately that the downturn is affecting the shopping patterns of their traditional customers.