Will Ted Baker (LON:TED) be looking sharp following Wednesday’s full year results?
It’s already been a busy 2019 for the fashion brand, one that saw it shoot up from £15.56 to a 3-month peak of £20.50 within the first 10 days of the year, only to briefly tumble back below £17 at the end of February. Ted Baker PLC now sits at a current trading price of £17.98 (Spreadex, 19.03.2019).
The reason for that initial rise was January’s post-Christmas trading update. For the 5 week period to 5th January, retail sales rose 12.2% on a reported basis, with an 18.7% increase in e-commerce sales, which represented 25.7% of total retail sales. All this as the company’s average retail square footage rose by 5% to 429,576 square foot. Ted Baker also said that its gross margins remained ‘in line’ with its expectations for the full year.
Well, those expectations were to change at the end of February. There Ted Baker announced it is now forecasting pre-tax profit of £63 million, way off the previously expected £74 million, with the company blaming a £2.5 million hit from foreign currency movements, additional product costs of £2.5 million and an ‘unanticipated’ £5 million write-down related to ‘aged stock’ in Asia and the US.
And this is ‘before previously announced costs associated with the ongoing independent external investigation, exceptional costs relating to the previously announced debtor balances owed by House of Fraser and the acquisition of No Ordinary Shoes Limited and No Ordinary Shoes USA LLC and other non-cash impairments relating to retail assets’.
Ted Baker is also in need of a new CEO, after founder Ray Kelvin stepped down at the start of March due to claims of harassment (the aforementioned ‘external investigation’).
With a lot going wrong at the company, investors may be nervously eyeing Ted Baker’s dividend heading into Wednesday’s annual results.
Ted Baker has a consensus rating of ‘Buy’ alongside an average target price of £24.45.
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