N Brown steals the limelight after strong Christmas

ANALYSIS_ British apparel group N Brown (BWNG.L) has enjoyed a 5.2 percent increase in revenue in the 19 weeks to January 11 on strong Christmas trading. Like-for-like revenue during the festive period was up higher (+7.2 percent) despite the company´s gross margin fell behind

marker´s expectations.

On the back of the news, the plus-size fashion retailer said it forecast full-year results to March 1 to remain broadly in line with expectations and advanced its plans for brick and mortar expansion.

The advanced plans to reinforce the retailer´s online and catalogue businesses by expanding further into the high street have been warmly welcomed by the market. Revenue at N Brown has steady increased, keeping its shareholder quite happy for the past five years.

The owner of online lingerie store Figleaves and plus-size brand Simply Be said underlying sales rose 5.1 percent in the 19 weeks to 11 January.

"Our whole mature portfolio of brands is really seeing increased browsing and propensity to shop online from tablet computers," said chief executive Angela Spindler. "Older customers are now prepared to place an order using a tablet, which they typically weren't on a mobile phone. It's a real driver to online growth in that market," she said.

Market backs up N Brown plans on strong Christmas

Shares have more than doubled in value during the past two years, currently trading on 19 times forecast earnings, falling to 18 times next year – “which looks expensive given revenue growth of about 5 percent and pre-tax profit growth of 8 percent,” according to the ‘Sunday Telegraph’.

N Brown Group (LON:BWNG)‘s stock had its “outperform” rating reaffirmed by Credit Suisse in a research note issued as soon as the company reported seasonal figures. The Swiss private bank has a 620 pence target price on the stock, which suggests a potential upside of 10.81 percent from the stock’s previous close.

Similarly, analysts at N+1 Singer reiterated their “buy” rating on shares of N Brown Group in a research note to investors, setting their objective price at 550 pence on the stock. Separately, analysts at Jefferies Group raised their price target on shares of N Brown Group from 575 to 630 pence. They now have a “buy” rating on the stock.

N Brown Group has a one year low of 354.735 pence, compared to a year high of 578 pence. The company’s market cap is 1.596 billion pounds.