Shares of Ted Baker fell nearly 14% today after the UK clothing and accessories retailer warned of a "challenging" remainder of the year as it posted a 3.2% drop in pretax profit for the first half.
Ted Baker, which operates 544 stores, concessions and outlets worldwide, has been focusing on its fast-growing online and wholesale businesses to offset retail sluggishness as consumers spend less.
"Whilst we believe that the second half of the year will remain challenging due to external factors, we are well positioned to continue Ted Baker’s long-term development", the company's chief executive Ray Kelvin said.
Ted Baker's pretax profit fell to £24.5m for the half-year ended August 11 from £25.3m a year earlier as more promotions to boost sales dragged on margins.
But the promotions helped overall revenue rise 3.5% to £306m, with e-commerce sales surging more than 24% to £53m.
Retail sales were up 1.1%, the company said, adding that it was hurt by the hot weather across the UK and Europe earlier this year.
Sales at Ted Baker's wholesale business, which supplies products to stores operated by license partners, was up over 10% and margins improved to 43.4% from 40.2% last year.
