Shares in Ted Baker tumbled by more than 11% this morning (27 February) as the UK lifestyle brand warned it expects full-year profits to be lower than expected.
In a statement, the group said for the financial year ended 26 January 2019 profit before tax is now expected to be in the region of GBP63m (US$83.8), compared to forecasts of GBP73.8m.
What’s more, the revised figure is before previously announced costs associated with the ongoing independent external investigation into allegations levelled at founder Ray Kelvin – who is currently taking a voluntary leave of absence while the investigation continues – exceptional costs relating to the previously announced debtor balances owed by House of Fraser and the acquisition of No Ordinary Shoes Limited and No Ordinary Shoes USA LLC, and other non-cash impairments relating to retail assets.
Ted Baker said pre-tax profit for the year 18/19 has been adversely affected by three non-cash impacts.
Foreign exchange movements in the final week of the financial year, primarily GBP/USD and GBP/EUR, have impacted profit by about GBP2.5m, while technology upgrades have cost the group a further GBP2.5m. In addition, its recent systems and warehousing transitions in Asia and the US, as well as “a more prudent view” on aged stock, will bring a GBP5m hit.
The group will announce its full-year results on 21 March.