Boohoo trims full-year revenue forecasts
Fast fashion brand Boohoo trimmed full-year revenue guidance on Thursday after sales fell sharply in the last four months of 2022.
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The online retailer said group revenues fell 11% in the four months to 31 December, or by 13% on a constant exchange rate basis, to £637.7m. In the UK, sales were down 11%, and by 12% in the US.
The AIM-listed firm said it had come up against strong comparatives, while extended delivery times weighed heavily on the international division.
As a result, it now expects revenues for the year to 28 February 2023 to fall 12%, compared to previous guidance for a 10% decline. Adjusted earnings before interest, tax, depreciation and amortisation margin is expected to be 3.5%, against a previous forecast for between 3% and 5%. Forecasts for EBITDA of around £63m were left unchanged.
As at 0845 GMT, shares in Boohoo had lost 5% at 44.99p.
John Lyttle, chief executive, said: "Performance in the period is line with expectations, and reflects the normalisation of the channel shift online over the last 12 months, but demonstrates the significant market share gains the group has made over the last three years.
"Looking ahead, while the demand outlook is uncertain due to macroeconomic factors, cost inflation is expected to begin to moderate in the second half of the year."
Victoria Scholar, head of investment at Interactive Investor, said: "Fast fashion online retailers have struggled lately with increasing costs, delivery problems caused by strike action over Christmas and the fading pandemic-era boom in online shopping, as consumers return to physical stores.
"Analysts are turning increasingly sour on the stock, with several price target downgrades recently."
Jefferies, which retains a ‘buy’ recommendation on Boohoo, said: "While headwinds are expected to continue into the first half of 2024, we are encouraged to see management successfully controlling the factors it can - inventory, costs - and see positives to feed into performance as we progress through 2023."