Ted Baker in good shape: strong momentum and nod from market

ANALYSIS_ British fashion retailer Ted Baker has noted an 18 percent rise in group sales after its spring and summer collections sold well in the UK and abroad. The uplift has afforded the retailer a general nod from the market, as well as some positive reviews. Ted Baker enjoyed an 18 percent

lift in sales for the 19-week period to June 7 that was helped in the UK by a 9.5 percent increase in trading space as the firm opened two new stores, at Heathrow's Terminal 2, and in Glasgow.

Internationally, the group also enhanced its footprint as it opened new stores in Philadelphia and California; concessions in France, Spain and Tokyo; and a joint

venture outlet in Brisbane. At the end of the 19-week period, the group had more than 180 stores in the UK and another 60 across Europe, the US, Middle East and Asia.

Cantor Fitzgerald analyst Freddie George said: "The trading update was better than our expectations and indicates that the spring and summer ranges have been well received both in the UK and overseas." George added that Ted Baker should see strong momentum in its womenswear sales, which he said accounts for 56 percent of the fashion group's sales. The analyst added that the group also had "a significant opportunity" to keep growing its online sales.

The firm confirmed that it performed well in established markets, as well as continued progress in newer markets.

Ted Baker enjoys good momentum in UK and abroad

Ray Kelvin CBE, founder and chief executive commented the results highlighting that "The Ted Baker brand has continued to perform very well and we have delivered further progress across our global markets and distribution channels."

On a separate line, Ted Baker added that its online business continued to grow, with sales rising 48.1 percent over the period. Gross margins were in line with its expectations and last year, the company added in a note.

On the wake of the news, Ted Baker plc (LON:TED) earned a consensus rating of “Buy” from the eight brokerages that are covering the stock, as reported ‘AnalystRatingsNetwork’. Consensus forecasts had been for 13 percent sales growth overall while gross margins were in line with its expectations and last year.

Cantor Fitzgerald upgraded its 2015 profits forecast to 45.5 million pounds from 43.5 million pounds, with analyst Freddie George saying that the upbeat statement indicated the Spring/Summer ranges had been well received both in the UK and overseas.

Retail sales for the period were 15.8 percent above the same time last year, with wholesale sales 25.2 percent higher, reflecting a good performance from its UK and export business and a strong performance from its US wholesale business, as market and company highlighted.

"We are pleased with the performance of our spring and summer collections both in the UK and internationally, which is testament to our skilled and passionate team,” happily summed up Kelvin.

"Commitment to quality, design and attention to detail underpins everything we do and we remain focused on our strategy to further develop Ted Baker as a global lifestyle brand," concluded the retailer’s CEO.

Angela González Rodríguez