N+1 Singer reviews N Brown after profit warning

9th Oct 2014 12:21

N+1 Singer is taking another look at its stance on N Brown after mild weather forced the catalogue and online retailer to warn on annual profits, although the broker remained optimistic.N Brown, whose brands include Jacamo, Simply Be and Figleaves, on Thursday unveiled interim results matching lower hopes, but reduced annual profit guidance by 12% as it warned that the warm autumn was hitting fashion retailers.N+1 Singer, which is reviewing its 'buy' rating on the shares, said it still thought they may be a buying opportunity because of demographic trends, with the company tending to focus on older customers and those with particular fashion needs.Before the arrival of a warm September, it said changes being made by the group to focus more on autumn clothing looked poised to improve growth rates and profitability.The broker's analyst Matthew McEachran added that a sell-off in the shares after the announcement, which resulted in a 45p or 12.9% fall to 303.2p at 12:56 in London, looked overdone."Whilst the magnitude of the revision is a disappointment, seasonal weather conditions have returned and the UK and overseas sales potential previously highlighted remains unchanged. Alongside anticipated improvements in margins/costs, the share price depression represents a buying opportunity," he said.