Ted Baker shares slide as it warns on profit
Fashion retailer Ted Baker warned on Wednesday that profit for the financial year ended 26 January 2019 will be down on the previous year as it takes a hit from currency movements, additional costs following the transition to new systems and a writedown in the value of aged stock.
FTSE 250
19,601.98
17:09 25/04/24
FTSE 350
4,434.34
17:09 25/04/24
FTSE All-Share
4,387.94
16:49 25/04/24
General Retailers
3,915.52
17:09 25/04/24
Ted Baker
109.80p
16:40 20/10/22
The FTSE 250 company said it now expects pre-tax profit to come in at around £63m, down from £73.5m the year before.
The group, which is due to release its full-year results next month, said foreign exchange movements in the final week of the financial year, primarily GBP/USD and GBP/EUR, have resulted in a mark-to-market profit impact of around £2.5m.
In addition, the recent systems and warehousing transitions in Asia and the US, as well as "a more prudent view" on aged stock, have resulted in an unanticipated write-down in the value of inventory of approximately £5m.
"Ted Baker remains fully committed to driving improvements in the net working capital to sales ratio and will provide an update at the full-year results presentation," it said.
At 0815 GMT, the shares were down 12% to 1,758p.
Liberum said that while the adjustments are clearly disappointing, they have no impact on the investment case and the outlook. The brokerage cut its price target to 2,800p from 3,100p but retained its ‘buy’ rating on the stock.
"The adjustments made to FY19 profits are unfortunate but they are on-off, non-cash and there is no impact to the outer year expectations. Importantly, the majority of these amendments result from internal reviews and subsequent tightening of reporting systems following the group’s upgrade to systems and infrastructure over time."