The Courier & Advertiser (Fife Edition)
Ted Baker set to report amid tough climate
Ted Baker is expected to report another set of disappointing figures this week as a combination of low consumer confidence, Brexit and the weather conspire to hit the fashion chain.
City analysts predict the retailer, which releases figures for the third quarter on Thursday, will see “challenging conditions” on the high street drag on sales.
Caroline Gulliver, analyst at broker Jefferies, said: “After a subdued first-half performance, we do not expect much relief in quarter three, given the unseasonably warm temperatures across the UK and Europe for some of the autumn.
“Consumer confidence has also dipped across the UK and the Eurozone, affecting 67% of group sales.”
Sales at Ted Baker are tipped to grow 5% in the period, down from the same period last year when it saw revenue grow 8% in constant currency.
Jefferies has also downgraded its full-year profit expectations for Ted Baker.
In October, the retailer revealed a hit from collapsed department store chain House Of Fraser as it posted lower halfyear profits.
The retailer said pre-tax profits fell 3.2% to £24.5 million in the six months to August 11, with the group writing off £600,000 owed by House Of Fraser, which collapsed into administration in August and has since been bought by Sports Direct.
High-street-store sales plummeted 10.4% per square foot in constant currency.
At the time, it also warned that hotter-than-usual weather across the UK, Europe and east coast of America had affected trading in September.
Ms Gulliver believes that while trading will improve, Brexit could prove a major headache next year.
She said: “The unseasonable weather and current trading challenges will, hopefully, pass soon. Brexit concerns will likely persist into 2019 – to March and beyond – depending on negotiations.
“In 2018, 57% of sales came from the UK, which could face border delays, weaker consumer demand, foreign exchange-affected sourcing costs and wage inflation from labour shortages.”