A sharp de-rating at plus size fashion retailer N Brown (BWNG) could present a buying opportunity, according to analysts. The Simply Be-to-Jacamo brand owner remains a structural retail winner, while downgraded estimates could prove cautious.

A profit warning (9 Oct) caused by unseasonably warm September weather, marketing and credit policy changes and heavy investment, triggered downgrades. Yet Shares believes CEO Angela Spindler’s strategic plan to shift the business further away from mail order and more towards multi-channel with a ‘fashion that fits’ focus is astute.

Agenda - N Brown - Oct 14

Good growth in customer numbers, notably at relaunched and biggest brand JD Williams, suggests sales and profits could reaccelerate in the second half. The company is also a structural winner, plugged into the transactional shift towards the web as well as longer lifespans and bulging waistlines on both sides of the pond.

N+1 Singer, with a 390p price target implying 33% upside, has cut its February 2015 profit forecast 13.5% to £89 million for earnings of 24.8p. Forecasting recovery to £100 million and 27.9p next year, the broker sees the dividend held at 14.2p this year ahead of 14.9p next.

Issue Date: 20 Oct 2014