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Ted Baker annual sales grow 11.4 percent, pre-tax profit up 12.3 percent

By Prachi Singh

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Business

Ted Baker Group revenue for the 52 weeks ending January 27, 2018 increased by 11.4 percent or 9.6 percent in constant currency to 591.7 million pounds (837.4 million dollars). The group gross margin remained constant at 61 percent. Profit before tax and exceptional items increased by 11.7 percent to 73.5 million pounds (104 million dollars) and profit before tax increased by 12.3 percent to 68.8 million pounds (97.4 million dollars). The company’s adjusted basic earnings per share, excluding exceptional items, increased by 12 percent to 127.7p and basic earnings per share increased by 12.6 percent to 119 p.

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“I am pleased to report a year of continued progress in Ted Baker’s expansion as a global lifestyle brand. Our new collections have been received positively and although we anticipate external trading conditions will remain challenging across many of our global markets, the strength of our brand and business model mean that we remain well positioned to continue the group’s momentum and long-term development,” said Ray Kelvin CBE, Founder and Chief Executive in a statement.

Review of Ted Baker’s full year performance

The company said, retail division sales rose 10.4 percent or 8.5 percent in constant currency to 442.5 million pounds (626.4 million dollars), despite a challenging trading environment across some of our global markets. The growth was driven by continued investment across the retail channel in new and existing stores and e-commerce platform. Ecommerce sales grew by 39.8 percent or 38.7 percent in constant currency to 101.1million pounds (143 million dollars) and represented 22.8 percent of total retail sales.

The retail gross margin increased to 67 percent, reflecting a change in mix between full price and outlet sales and also an improved full price sell-through in the retail channel.

Group wholesale sales increased by 14.6 percent or 13.3 percent in constant currency to 149.2 million pounds (211.2 million dollars), reflecting a good performance from UK wholesale business, with sales increasing by 9.3 percent to 94.1 million pounds (133.2 million dollars), and a strong performance from the North American wholesale business, with sales increasing by 24.7 percent or 21 percent in constant currency to 55.1 million pounds (78 million dollars). The wholesale gross margin decreased to 43.3 percent.

Sales of Ted Baker menswear rose 10.1 percent to 249.7 million pounds (353.6 million dollars). Menswear represented 42.2 percent of total sales in the period. Ted Baker womenswear sales also increased 12.4 percent to 342 million pounds (484.3 million dollars). Womenswear represented 57.8% of total sales. Licence income was up 17.6 percent to 21.4 million pounds (30.3 million dollars).

Ted Baker’s results across geographies

Retail sales in UK and Europe increased by 7.7 percent or 6.4 percent in constant currency to 301.1 million pounds (426.5 million dollars) with ecommerce sales increasing by 35 percent to 82.5 million pounds (116.8 million dollars). As a percentage of UK and Europe retail sales, ecommerce sales represented 27.4 percent. Sales per square foot excluding e-commerce sales decreased reflecting the move to online. However expansion continued with store openings in London, Oxford and Paris and outlets in Gloucester and Roermond. The company also relocated three of stores, which included Heathrow T3, and our outlets in Bicester and La Vallee. Further concessions with premium department stores in the UK, France, Germany, the Netherlands and Spain were opened and two licence partner stores were also opened in Turkey. Sales from our UK wholesale division increased by 9.3 percent to 94.1 million pounds (133.3 million dollars).

Sales from retail division in North America increased by 16.2 percent or 12.4 percent in constant currency to 120.1 million pounds (170.2 million dollars) with e-commerce sales increasing 66.3 percent or 61.4 percent in constant currency to 16.3 million pounds (23.1 million dollars). As a percentage of North America retail sales, e-commerce sales represented 13.6 percent. During the period, Ted Baker opened new stores in Houston, Los Angeles and Montreal and expanded the Miami Aventura store and opened an outlet in Chicago and concessions in Canada with a premium department store. New concessions were also launched in Mexico with the licence partner. One store was closed in Los Angeles and one in New York and three stores were impaired. Sales from North American wholesale business increased by 24.7 percent or 21 percent in constant currency to 55.1 million pounds (78 million dollars).

Retail sales in Asia increased 19.7 percent or 17.3 percent in constant currency to 21.3 million pounds (30.1 million dollars). In China, a store in Shanghai was opened; and in Japan, its Tokyo store was relocated and a new concession was opened. In South Korea, the company closed its concessions and transitioned the retail operations to a distributor with the knowledge and experience to drive growth locally. During the period, our Middle Eastern licence partners performed particularly well and opened stores in each of Dubai, Kuwait, Lebanon, Qatar and Saudi Arabia and South East Asian licence partner opened a store in Indonesia and Malaysia. As at 27 January 2018, the company’s licence partners operated 60 stores and concessions across the Middle East, South East Asia and Africa. The joint venture with our Australasian licence partner, Flair Industries Pty Ltd, continued to perform well. During the period, Ted Baker opened one new store in Bondi and closed one in Melbourne. As at 27 January 2018, it operated nine stores in Australasia.

Ted Baker recommends dividend of 43.5p per share

Reflecting the group’s continued good performance and the board’s confidence in the outlook, the company has recommended a final dividend of 43.5p per share compared to 38.8p in 2017, making a total for the period of 60.1p per share, an increase of 12.1 percent on the prior period.

Meanwhile, in the UK and Europe, the company has opened a new store in London Luton Airport and plans to open new stores in Barcelona Airport and London Bridge station, an outlet in Lyon and our first outlet in Neumunster, Germany, along with further concessions in the UK, France, Germany and Spain. In North America, Ted Baker plans to open stores in Austin and Orlando, along with further licence partner concessions in Mexico. In the rest of the world, a further concession will be opened in Japan. High single-digit sales growth in constant currency is expected from wholesale in the coming period. After opening a store in India, further store openings planned in Egypt, India, Indonesia, Kazakhstan, Saudi Arabia, Singapore and Thailand.

The company said, 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 and it anticipates that external trading conditions will remain challenging across many of the company’s global markets.

Picture:Ted Baker media gallery

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