Having juggled too many balls last year in what is now regarded as the year of heavy lifting, and impacted by a dire Aut/Win season, N Brown has thus far failed to deliver its ambitious growth plan. Forecast FY’16 PBT is 5% lower than FY’13, notably driven by lower EBIT margins (-160bps) contrasting a core objective of better margins. Despite the setback, though, we continue to support the strategy being implemented. Whilst not a catalyst for the shares, lead indicators reassured at the time of the prelims and the Q1. We therefore continue to anticipate an uptick in sales and profitability and believe recent weakness provides a timely buying opportunity. Upgrade to Buy.
