Ted Baker – All Dressed Up, But Where Will They Go

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Relaxed covid restrictions helped Ted Baker plc (LON:TED)’s half year revenue rise 21.4%, excluding currency changes, to £199.3m. Revenue was 36.4% below pre-pandemic levels. The proportion of items sold at full price rose by more than 5 percentage points, which helped pre-tax losses narrow to £25.3m from £86.4m.

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In the 12 weeks to 6 November, revenue rose 20%. The recovery in retail sales has been uneven with stores exposed to travel retail continuing to struggle. Full price sales continued to grow as a proportion of sales, though less promotional activity meant eCommerce sales fell 10%.

Management now expects have a net cash position by year-end and is “comfortable” with market expectations for full-year revenue of £468m and a £23.8m pre-tax loss.  The new eCommerce platform is on track to launch in early 2022

The shares rose 3.2% following the announcement.

Ted Baker's Q2 Earnings

Laura Hoy, Equity Analyst at Hargreaves Lansdown:

“Ted Baker’s half year results showed the fashion retailer is clawing its way back towards profitability as it works to restore its image as a premium brand. With weddings back on the social calendar and offices reopening, people are willing to spend more on their clothes and as a result Ted saw losses narrow as margins improved.

The headline figures dress up a concerning decline in eCommerce sales though. Heavy promotional activity last year meant online sales were booming, so the group was up against tough comparisons. And we commend the group’s commitment to backing away from discounting, which eroded the brand image. Still, a double-digit decline in online sales is troubling.

A big part of Ted’s transformation plans rests on improving the group’s digital presence and progress on this front has been sluggish with management pushing back the launch of its new online platform to early 2022. While easing pandemic restrictions means people can return to in-person shopping, it doesn’t mean they will. Losing ground in e-commerce is bad no matter how you slice it. The online shopping boom hasn’t showed any signs of slowing, and the we would’ve like to see the same  from Ted’s eCommerce sales.”

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