Analysts have mixed views on N Browns first-half trading performance

Analysts have mixed views on N Brown's first-half trading performance

Home shopping group N Brown this morning (16 September) reported a "mellow" first-half performance, with sales slipping as it continues with a number of strategic changes. While some analysts described the results as "disappointing", others remained upbeat about the retailer's future growth, forecasting a "healthier" second-half.

Conlumino analyst Neil Saunders:
"Following on from a solid performance last year and in its first quarter, the first half as a whole has proved to be a little more challenging for N Brown with total sales down by 0.6% and like-for-likes slipping by 0.5%. That said, most of this is explained by some of the strategic changes being made at the group as CEO Angela Spindler puts her house in order.

"Overall, while the headline numbers are not as robust as we have been used to from N Brown, the company is in a period of necessary transition. This change will ultimately create a platform for stronger future growth. All signs point to a healthier second half."

Shore Capital analyst Darren Shirley:
"The update represents confirmation of what has been another quite mellow trading period from the group, continuing the momentum recorded in first-quarter of full-year 2015, when a slowdown in trading performance was revealed with total sales then rising by 2.6%.

"Despite the subdued sales performance, we keep our fiscal 2015 forecasts unchanged noting that management states "with a strong activity plan for the second half we are on track to deliver our year end forecast'.

"In a year of transition, we expect N Brown stock to tread water in the near-term, given the constrained sales momentum, relatively flat full-year EPS expectation and reasonably fair current valuations, though in the medium term the upside could be considerable if management deliver on its four-year strategy."

Investec analyst Kate Calvert:
"The implied second-quarter sales decline was worse than expectations. Transitioning of marketing spend to the second half and planned reduction in home and electrical sales to help credit book quality hit sales. While management talks about being on track to achieve its full-year forecasts, investors are unlikely to give this ‘jam tomorrow' story the benefit of the doubt."

Click on the following link to read: UK: N Brown on track despite "mellow" H1 performance.