This week’s profit warning from the fashion retailer Ted Baker carried some of the classic hallmarks you often see on these occasions. Profit warnings are right up there with some of the most gut-wrenching events to hit investors. That’s because they cause massive uncertainty about whether the problems are easily fixable… or an early clue to bigger trouble ahead.
In the case of Ted Baker, this profit warning wasn’t actually the first. There was another back in February, which related to its previous financial year (ending in late January). So this week’s warning came just five months into its new 2019/20 financial year. Pre-tax profit forecasts have been pegged back to £50-60 million versus previous analyst expectations of more like £70 million. To be cutting expectations this early suggests the company is already reeling from difficult trading conditions.
So how did this news affect the price?
On the day of the trading update (Tuesday, 11 June), Ted Baker shares fell by 29 percent. That sliced its market cap to around £425 million. Research by our analysts at Stockopedia suggests that the average profit warning causes an immediate fall of 19.2 percent on average. So this was a particularly…
Disclaimer: Please note all prices are for information only, they should not be relied upon for accuracy or trading. All prices quotes are based on CFD prices and are similar though not always identical to real exchange prices. STOCKTRKR or anybody connected with STOCKTRKR will not accept any liability for loss or damage arising from use of any information/commentary/charts or articles which is provided 'as is' for educational purposes only, nothing contained on this website should be considered as investment advice - please seek proper investment advice from registered financial broker or institution if you wish to trade on global markets and ensure you are familiar with the risks.
