Ted Baker shares jump as it reports ‘good progress despite Covid-19’

Shares in Ted Baker rallied by 10% at the open on Tuesday on the back of its AGM trading update which pointed to ‘resilient trading and good progress despite COVID19 disruption’. During the 11 week period from 3 May to 18 July, the fashion brand reported a 55% increase in overall group revenue with ‘a particularly strong performance online.’ The group said this reflected ‘more sophisticated cross-category merchandising, refreshed social media activity and increased marketing spend’.

In terms of the company’s three-year transformation plan, Ted’s Formula for Growth, it said ‘good progress’ had been made ‘on all the key operational and financial milestones for FY21’. Meanwhile, net cash as of 11th July came in at was £56.7m, ‘ahead of management expectations due to strong cash management’.

Chief executive officer, Rachel Osborne said, ‘I am pleased with the early progress we have made in driving operational excellence and cost efficiencies since the launch of Ted's Formula for Growth in June. Our customers are engaging with the brand and responding to our COVID19 promotional activity, as evidenced by our resilient trading over the past 11 weeks.

Our performance is encouraging, but I caution that it is still early days, and we have a substantial amount of work to do over the next 12 months against a backdrop of significant uncertainty in the world.’

Ted Baker: technical analysis

The stock has lost nearly 60% of its value since the peak at the end of May. However, it managed to push above its descending trendline of resistance to rally off the July lows by 25% this month. Today’s price action has seen the stock break above its 50-period simple moving average on a 4-hourly chart which was foreshadowed by a buy signal from the stochastic oscillator on Monday. Nonetheless, price remains a significant distance below its longer-term moving averages with substantial gains still required to restore the highs seen earlier this year.