Ted Baker’s share price plunged 25 per cent this morning after the fashion retailer warned on profits amid “extremely difficult trading conditions”.
The company said underlying profit before tax for the year ending 25 January 2020 is likely to be between £50m to £60m, compared to a company compiled consensus of £70.9m.
Ted Baker blamed the negative outlook on consumer uncertainty and increased promotional activity, which it expects will continue to impact its trading performance.
Ted Baker reported a 3.8 per cent increase in group revenue between 27 January and 8 June in the trading update this morning. Meanwhile, total retail sales, including e-commerce, declined by 0.3 per cent.
The profit warning comes as the retailer attempts to move on from a misconduct scandal that saw founder Ray Kelvin leave the firm. Finance chief Lindsay Page replaced Kelvin in April after the firm posted its first annual profit drop since the financial crisis.
Page said: “As a team, we are proactively addressing the challenges we face as an industry.
“Several of our new product initiatives will commence imminently and we are confident in our collections for the coming season.
“We are relentlessly focused on achieving cost efficiencies as well as further cost savings throughout the business.”
Ted Baker’s acquisition of No Ordinary Shoes in the US boosted the firm’s footwear revenue, and the company said it had “appropriately addressed” challenges with its spring and summer collections.