Ted Baker has reported a jump in sales and profit, saying it had overcome “challenging” trading conditions on Britain’s high street in the first half of the year.
The upmarket British fashion brand, which does not advertise, said on Tuesday that pre-tax profit increased by a fifth to £21.5m in the 28 weeks to 13 August, while revenue was up 14.4% to £259.5m.
“Ted Baker continues to perform well across all distribution channels despite challenging trading conditions across our markets,” said Ray Kelvin, the brand’s founder and chief executive.
The clothing and accessories retailer said revenue rose 8.5% in its UK and Europe division, to £131.2m, “despite tough trading conditions and recent events in northern Europe”.
Investors responded positively to the results, with shares in the company up 5%.
Reaction to its new autumn/winter collection had been pleasing, the company said, but “external factors” in markets including the US meant trading continued to be difficult.
The consumer backdrop was also challenging in Asia, but the company said it was positive about the long-term opportunities in the region.
It added: “While the group has had a good start to the financial year, our results for the full year will, as always, be dependent on the second half trading period. Underpinned by the strength of the Ted Baker brand, our business model and balanced distribution channels, we remain confident of delivering continued growth and development.”
Profit was boosted in the first half of the year by a £1.2m foreign currency gain on its overseas earnings resulting from the sharp fall in the value of the pound since the Brexit vote on 23 June.
The British Retail Consortium warned on Tuesday that a weak pound was likely to drive up companies’ import costs.
Ted Baker said sales over the first half were helped by investment in news stores and online performance, with internet sales up almost 30% at £29.7m. The company has 470 stores, concessions and outlets worldwide, with 186 in the UK.
George Salmon, equity analyst at Hargreaves Lansdown, said the results were encouraging. “Any aspirational fashion brand that can consistently grow sales across five continents without advertising is doing something right.
“This is the company’s first update since Brexit, and is a strong showing in tougher trading conditions. The second half of the year is more important to Ted Baker than the first; nonetheless, the news that sales growth remains robust provides reassurance that the group can continue to thrive, even in challenging times.”
