Is Ted Baker plc set to outperform its peers

Shares of Ted Baker(LSE: TED) moved higher in early trading this morning after the company released strong half-year results and said "we remain confident of delivering continued growth and development."

///>

With mid-market fashion bellwether Next struggling, I'm thinking the higher end of the market could be the place to be for investors. In particular, I'm wondering if British premium and luxury brands expanding in international markets -- and benefitting from the weakness of sterling -- could be big winners over the next few years.

Let's have a look at premium retailer Ted's results. Then weigh up its prospects and those of luxury sector players Jimmy Choo(LSE: CHOO) and Burberry(LSE: BRBY).

Suit you, sir

Ted reported group revenue of £259.5m for the 28 weeks ended 13 August, which was up 14.4% (10.7% at constant exchange rates) on the equivalent period last year. Profit before tax increased by 20.5% to £21.5m from £17.8m, with £1.2m of the increase coming from foreign exchange gains.

This excellent performance was delivered despite "challenging external trading conditions," not just in the UK but "across all of our markets." International sales, which already contribute over a third to group revenue, are growing fast, notably in North America, and were up 28.7% (18.8% at constant exchange rates) during the latest period.

Ted's shares are trading at 2,535p, as I'm writing, and the trailing price-to-earnings ratio is 23.5. That looks attractive to me for a company with Ted's earnings momentum and the stock is very buyable on this rating in my view.

Walking the walk

Jimmy Choo also reported "challenging market conditions" in its latest half-year results (to 30 June) but increased revenue by 9.2% (3.8% at constant exchange rates) to £173.1m. Operating profit advanced 42.6% to £25.3m with £4m coming from exchange rate gains.

A 26.6% rise in underlying earnings puts the company on a trailing P/E of 23.3 (at a share price of 135p) -- a rating very similar to Ted Baker. Jimmy Choo looks set to benefit even more than Ted from the weakness of sterling, because 89% of its revenue comes from outside the UK.

The company said in its half-year results that "the prospects for the business in its 20th year have never looked better." I agree. And again, this looks a very buyable stock to me.

Retrench

FTSE 100 luxury house Burberry isn't enjoying quite the same momentum as its smaller and younger peers. After posting flat revenue and an 8% fall in earnings last year, management announced a three-year plan to reinvigorate sales, improve productivity and cut costs by £100m.

The company said in July that its plans are on track, and that it also expects to see a foreign exchange benefit of £90m this year. The benefit could be even bigger now, with a further weakening of sterling, but we'll know more this time next week when Burberry releases a half-year trading update.

As things stand, the company trades on a trailing P/E of 21.6 at a share price of 1,510p. I fully expect this flagship of timeless British fashion to return rapidly to growth, and I rate the shares a buy.

But which is the top pick?

I reckon Burberry, Ted Baker and Jimmy Choo could all deliver for investors in the coming years, but which one of the three has been proclaimed A Top Growth Share From The Motley Fool?

You can find out the name and read an in-depth analysis of the company by the Fool's experts in this exclusive FREE report. It won't cost you a penny and comes with no strings attached so CLICK HERE.

G A Chester has no position in any shares mentioned. The Motley Fool UK has recommended Burberry 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.