LONDON (ShareCast) - A pick-up in trading towards the end of the third quarter at N Brown should please the market, according to Peel Hunt, though a 'hold' recommendation was maintained for the stock.
However, the broker said there could be an "opportunity for investors" if management at the home-shopping fashion retailer can restore confidence and deliver on targets next year.

After a 10.8% drop in sales for September, due to unseasonably warm weather, N Brown said it had returned to growth in October and November, leaving third-quarter revenues down just 2.3% overall.

"N Brown needs to deliver an accelerating fourth-quarter performance to put expectations back on track and restore market confidence," said Peel Hunt analyst John Stevenson.

In February, N Brown set out plans to deliver double-digit sales growth in the financial year ending February 2016. "A few downgrades later and sales forecasts sit at 5-7% growth for next year," Stevenson added.

"Following a shaky start, market forecasts for the next two-three years now materially lag the picture set out in February's strategy day, an opportunity for investors if management can restore confidence over peak and deliver an accelerating performance into 2016 fiscal year," he also said.

Peel Hunt has left its full-year forecasts unchanged following the statement, and kept its 325p target price for the shares, which were up 7.3% at 350.93p by 11:26.

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