17th Mar 2016 12:50
LONDON (Alliance News) - Ted Baker PLC on Thursday delivered pretax profit marginally ahead of analyst expectations as sales continued to grow and the fashion retailer tabled further expansion plans for 2016.
The luxury fashion retailer has been performing very well in recent years, expanding internationally into regions where the iconic British brand is proving very popular, such as North America and Asia. It has also stuck to a strategy of not discounting its goods and using word of mouth rather than expensive marketing campaigns to promote itself.
In the year ended January 30, Ted Baker's pretax profit rose to GBP58.7 million from GBP48.8 million the year before, which Cantor Fitzgerald said was slightly ahead of its GBP58.0 million forecast.
Revenue, which comprises retail and wholesale sales and licensing income, grew to GBP456.2 million from GBP387.6 million, in line with expectations.
Retail sales increased by 14% in the year to GBP348.4 million, on a 7.5% increase in average square footage. Regionally, sales in the UK and Europe grew by 8.9%, sales in the US and Canada were up by 27%, and sales in Asia rose by 31%, despite Ted Baker warning that the latter faces a challenging trading environment. E-commerce sales, meanwhile, rose by 46%.
Ted Baker has been expanding its retail space both in the UK and overseas, and said it is planning further store openings across both new and established markets in the current year.
In Europe, it will open a new store in Paris and further concessions in France, Germany and Spain, while continuing to invest in its e-commerce sites. In North America, it will open two stores in New York, one in Calgary, one in Miami and one in Ottawa. In Asia, it will open further concessions in China and Japan.
Wholesale sales, meanwhile, were up by 34% to GBP107.7 million, driven by strong performances in the UK and North America, and Ted Baker said it expects to see low double-digit sales growth in this division in the current year.
Licence income grew by 23% to GBP14.4 million, with the launch of new product licences in bedding, rugs and tiles being well-received, Ted Baker said, adding that it is planning further openings in Azerbaijan, Dubai, Egypt, Malaysia, Mexico, Saudi Arabia and Taiwan, along with its first store in Chile.
To deliver on its expansion plans, capital expenditure is anticipated to be above the previous year at GBP45 million.
Ted Baker will pay a total dividend of 47.8 pence for the year, up 19% on the 40.3p it paid the year before.
Liberum said Ted Baker "has closed another year of excellent progress" and praised the retailer's "first class track record of delivering strong sales and profit growth". Cantor Fitzgerald, meanwhile, hailed the brand as "unique" and "clearly differentiated from peers" as it "begins to gain momentum from a global perspective".
Ted Baker added that it is performing well so far in the current year, but did warn on tough trading conditions in Asia.
"We are pleased by the initial reaction to our Spring/Summer collections, which has been positive. Trading is in line with our expectations, with the exception of Asia, where, as has been widely reported, the trading environment continues to be challenging. Whilst Asia currently represents a small part of our business at 3.4% of revenue, we remain positive about the long term opportunities to develop the brand in this territory," Ted Baker said in a statement.
Shares in Ted Baker were trading down 1.6% at 2,902.56 pence on Thursday afternoon.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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