(Reuters) -Fashion retailer Ted Baker is “cautiously optimistic” about the outlook for the current year after a 35% year-on-year jump in sales in the fourth quarter, a period when pandemic-related restrictions were still in place, boosting its shares.
The British company, like other fashion chains, has seen demand bounce back, but people are still cautious about returning to city centres after the recent Omicron surge and this continues to affect footfall.
“We’re cautiously optimistic that people are coming back and returning to work and returning to some sort of — not normality now — but a slow return to going out,” Chief Executive Rachel Osborne said on a conference call with analysts.
“But we don’t expect a sudden step back to the pre-pandemic levels straight away. We believe this will build during the year,” she said.
Ted Baker’s sales in the quarter ended Jan. 29 benefited from demand for womenswear, bags and shoes.
The company’s shares were up 16% at 102 pence by 1000 GMT on the London Stock Exchange.
“We are very encouraged by management reiterating the (fiscal 2023) targets despite everything thrown at the group over the last two years,” analysts at Liberum said in a note.
Ted Baker, which has nearly 400 locations mostly in the United Kingdom, Europe and North America, is more than halfway through a three-year turnaround plan focused on cost cuts and boosting its online presence and product range.
Chief Financial Officer David Wolffe said on the analysts’ call that Ted Baker was also seeing increases in labour and material costs, especially in China, but has been mitigating the impact by improving its product sourcing.
(Reporting by Sachin Ravikumar in Bengaluru; Editing by Shounak Dasgupta and Jane Merriman)
