Ted Baker’s half year revenue rose 5.5% at constant exchange rates to £306m, with retail, wholesale and licencing sales all rising.
However, challenging conditions and unseasonal weather mean the rate of growth isn’t as fast as it has been in the past. This, together with higher costs, and a £0.6m write-off courtesy of House of Fraser, meant pre-tax profit fell 3.2% to £24.5m.
The group says the second half “will remain challenging due to external factors”. Following this news, the shares immediately fell 9%. The interim dividend rises 7.8% to 17.9p per share.
George Salmon, Equity Analyst at Hargreaves Lansdown said: “Ted Baker isn’t having the best of times at the moment. That sounds a strange thing to say when sales continue to rise, but the devil is in the detail.
“New openings and strong online growth is masking a poor performance from the group’s existing store estate. A significant fall in sales per square foot is unpalatable to say the least.
“To be fair to Ted Baker, its troubles aren’t all of its own making. Stock sold to House of Fraser prior to the department store being unceremoniously hauled aboard a Sports Direct lifeboat has been written off, while the cold weather earlier in the year has also impacted sales. It’s hard to shift spring lines when the mercury is freezing.
“The group is clearly up against it for the rest of the year, and this will dampen investors’ spirits. However, Ted has delivered excellent results for shareholders over the last 10 years, and this track record shouldn’t be discounted just yet. Still, to make the next decade just as strong, improvements are needed sharpish.”