Specialist fashion purveyor N Brown's (BWNG) solid first quarter trading update drives a relief rally. It shares rise 7.4% to 230.2p, putting an end to three months of being in a falling trend.

Chief executive Angela Spindler maintains full-year earnings guidance, downgraded with a profit warning in April, whilst also flagging encouraging trading and progress with the retailer's transformation.

Manchester-based N Brown specialises in plus-size and 50-plus fashion niches.

The update confirms relatively subdued trading as the broader fashion industry is having a difficult time at present.

The good news is the performance is far more resilient than investors were expecting going into the statement.

Total sales in the 13 weeks to 28 May 2016 softened by a better-than-feared 0.2%, while a 1.6% decline in product sales represented material improvement over the 3.5% fall witnessed in the three months to 27 February 2016.

Investors are also heartened by the fact N Brown's three 'Power Brands', namely Simply Be, Jacamo (brand ambassador Freddie Flintoff pictured) and JD Williams, continue to outperform.

The retailer also reports 3.4% growth in financial services income, driven by interest payments from new credit customers recruited over the previous financial year.

The retailer's transformation from a catalogue-led to a digital-first retailer continues apace. Online penetration rose 5 percentage points to 67% year-on-year, with mobile devices generating almost 70% of all traffic.

Spindler says the group wide transfornation programme, dubbed 'Fit 4 the Future', remains on track and on budget, and also reiterates full-year margin and cost guidance.

Stockbroker Shore Capital retains earnings forecasts of £85.2 million pre-tax profit, earnings per share of 24.1p and a 14.2p dividend for the current financial year.

Web chart - BROWN (N) - June 16

On the aforementioned dividend estimate, N Brown offers a plump prospective yield of 6.2% which might interest recovery investors.

'History tells us that such yields are not sustained, leading to either a dividend cut or capital appreciation,' says Shore Capital. 'We see very little scope for a dividend cut on current profit and cash flow forecasts.'

Issue Date: 16 Jun 2016