(Reuters) - Fashion retailer Ted Baker Plc (TED.L) on Thursday warned of challenging conditions in many of its markets after snowy weather in Europe and the U.S. east coast hit its early spring/summer trading.
The warning sent the company’s shares down more 8 percent, despite a 12 percent rise in the retailer’s annual pretax profit on the back of higher online sales.
“The recent unseasonal weather across Europe and the East Coast of America has had an impact on the early part of trading for Spring/Summer,” the company said.
Ted Baker cautious outlook adds to the gloom surrounding Britain’s retail sector, where updates from home improvement retailer Kingfisher (KGF.L) and floor covering seller Carpertright’s (CPRC.L) this week showed that discretionary consumer spending is under pressure.
Uncertainty about the British economy’s outlook after it leaves the European Union next year, plus stagnant real wage growth, have led Britons to cut back on non-essential spending.
Ted Baker, which trades from 532 stores and concessions worldwide, reported a double-digit increase in sales for the year ended Jan. 27, with e-commerce sales now making up nearly 23 percent of its total retail sales of 442.5 million pounds.
The company, which sells from more than 40 store and 55 concessions and outlets in North America, expects a rise in U.S. consumer demand after the country’s tax overhaul, passed in late December, which will give consumers more spare cash to spend, company Finance Director Charles Anderson told Reuters in an interview.
Analysts at Liberum said Ted Baker’s results showed a “solid performance”, especially against such a tough backdrop.
“Ted Baker should continue to outperform the market though as it has proven track record and this is being delivered due to its agile and flexible model with more latterly a significant contribution from e-commerce,” Liberum analysts said. They maintained a “buy” rating on the stock.
For 2017, group revenue rose to 591.7 million pounds and the company also raised its dividend by 12.1 percent to 60.1 pence.
Its shares were 7.6 percent lower at 1320 GMT and were the weakest on FTSE Mid Cap Index .FTMC.
Reporting by Radhika Rukmangadhan and Rahul B in Bengaluru; Editing by Subhranshu Sahu and Jane Merriman