Ted Baker Plc (“Ted Baker”, the “Group”)
Q4 2022 / Pre-close trading update
For the 12-week period from 7 November 2021 to 29 January 2022 (“the Period”)
Accelerating sales growth with significant improvement in full price mix. Net cash achieved at year-end and FY23 targets reconfirmed
Ted Baker Plc, the global lifestyle brand, today provides an update on trading for the 12 week period from 7 November 2021 to 29 January 2022. All figures in the text refer to 12 week versus 12 week comparison, given the 53rd week last year.
Q4 Highlights
1. Accelerating sales growth, with sequential improvement, despite Omicron headwinds
- Group sales growth of 35% compared to Q4 FY2021, increased from 18% reported at Q3
- Compared to Q4 pre-pandemic levels, Retail sales were running at -10% before Omicron warnings, falling to -42% during the Omicron surge
- Group successfully navigated the global supply chain disruptions with some modest impact on product availability
2. Brand strength supporting improving trading margin
- Trading margin improved over 350 bps across all channels
- Across H2, full price sales mix is up over 800 bps, re-establishing our premium brand positioning
- Inventory levels clean at year-end as Group has maintained tight stock discipline
3. Positive Net Cash and strong liquidity
- Net Cash at year end is positive £3.0m, in line with previously upgraded guidance
- Strong liquidity with bank facilities of £80m in place
4. For the year ahead, continuing confidence in reconfirmed FY23 targets
- Reconfirming financial targets set as part of Transformation plan in spring 2020
- £30m Free Cash Flow and EBITDA margin (pre IFRS16) of 7-10% anticipated for fiscal 2023
5. Encouraging response to new collections
- Womenswear AW21 collections performed well against the target product pyramid, with strong sales across bags, footwear and tops
- Performance on Menswear more mixed, with sales over-indexing on core and continuity product, with strong performance on footwear. We take key learnings into the SS22 collections
6. Brand partnerships growing further
- The Group has signed a new franchise agreement in the UK, with plans for at least three new store locations per year over the next three years
- We have expanded our successful home and bedding product licence with Bedeck to include North America, making it a global licence agreement starting July 2022. We have also extended our Jack Victor licence for North America for a further five years
7. Continued progress on ESG targets
- Continued progress with our Fashioning a Better Future Programme. We achieved a strong improvement in sustainable materials across all our collections for the year to 26%, up from 17% last year
8. Good progress on search for a new Chair
- The Group is making good progress on recruiting for a new Chair, with the search process well underway
Rachel Osborne, Chief Executive Officer, commented:
“ We continue to make good progress with our transformation and despite the impact of Omicron on the quarter, were pleased to deliver Group sales up 35% compared with last year. The strong improvement in trading margin is encouraging, along with the increase in full price sales mix, demonstrating the progress we're making as Ted re-establishes its premium brand positioning.
Our product is resonating with customers and we were particularly pleased with the performance of Womenswear, with bags, footwear and tops all selling well, and a strong initial reaction to the Spring/Summer 2022 collection. Ted is emerging from Covid a stronger more sustainable business and we're excited for the future.”