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Image: Ted Baker: Fair use

Like many clothing retailers, Ted Baker (LSE: TED) doesn’t complete its financial year until the end of January, and consequently full year results won’t be released until later this month. But the luxury fashion retailer did provide a trading update for the all-important festive period, which should give us strong clues as to how things will shape up when annual results are released on 23 March. It can sometimes be wise to buy ahead of results.

Surge in online sales

Well, given the tough trading backdrop, I think the company and its shareholders should be very pleased with trading during the peak festive period. During the eight-week period from 13 November 2016 to 7 January 2017 the group achieved a remarkable 17.9% improvement in retail sales, compared to the same period last year, equivalent to 10.6% on a constant currency basis.

What I found even most encouraging was the massive 35% surge in online sales (31% at constant currency). And after browsing the distinctive, if not quirky, website it’s not difficult to see why. As with their designer garments, the website is awash with nice little touches that sets it apart from other brands.

Buying opportunity?

Ted Baker is undoubtedly one of Britain’s most successful designer brands and yet I can’t remember ever seeing a TV ad campaign or huge poster ad on the side of the road. What’s more, unlike other brands, they haven’t (as yet) resorted to just sticking a girl in a bikini on the beach to attract attention. Respect for that.

In recent months the group’s shares have fallen back considerably from all-time highs of 3,555p, which in my opinion presents a great opportunity to pick up this premium retailer at an affordable price. With a forward P/E rating of 22, and continued double-digit earnings growth forecast for the medium term, it could be time to take a closer look at Ted.

Nice package

One of the by-products of the shifting trend towards online retailing is of course the increased use of all types of packaging. British-based international packaging business DS Smith (LSE: SMDS) is one of the companies benefitting from this increasing trend, and in my opinion looks set to continue with steady levels of growth over the coming years.

Interim results were impressive, with a 32% rise in pre-tax profits to £146m for the first six months of its financial year on a constant current basis, and revenues 7% higher at £2.36m. Today’s update was also encouraging, with management confirming that the company was performing in line with expectations, and continuing to build on the progress made in the first half of the year with sustained good volume growth.

However, the share price has soared by around 20% since November, lifting the P/E rating to 14, which I believe is fair value for the shares. I would suggest that keen investors wait for a significant retracement, and hence a better valuation, before pulling the trigger.

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Bilaal Mohamed has no position in any shares mentioned. The Motley Fool UK has recommended DS Smith and Ted Baker plc. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.