Boohoo forecasts flat sales growth in H1 2023

Boohoo Group Plc recorded a revenue increase of 14 percent reported and currency adjusted to 1.983 billion pounds in the year to February 28, 2022. Revenue over the two-year period increased by 61 percent from 1.235 billion pounds in 2020, at a time when apparel markets globally remain below pre-pandemic levels.

The company said that the trends impacting performance in the second half of FY2022 are expected to continue, including: uncertain consumer demand; tough comparatives as well as reduced levels of net sales growth due to the annualisation of elevated returns rates year on year; and sustained freight-related headwinds. As a result, the group currently expects revenue growth to be broadly flat in the first half of FY2023.

Adjusted EBITDA was 125.1 million pounds, a decrease of 28 percent on the previous year and 1 percent on 2020. Gross product margin was 170bps lower than in the prior year at 52.5 percent.

The company’s adjusted EBITDA margin was 6.3percent compared to 10 percent in 2021 and 10.2 percent in 2020 and pre-tax profit was 7.8 million pounds, a decrease of 94 percent versus 2021 and 92 percent against 2020. Adjusted diluted earnings per share was 4.39p, down 49 percent on the prior year and 25 percent versus 2020, while diluted loss per share was 0.32p, a decrease of 104 percent.

Boohoo posts growth in the UK

The UK market reported growth across all brands of 27 percent compared to 2021 and up 77 percent versus 2020, driven by the success of our multi brand strategy.

Revenue in the rest of Europe decreased by 10 percent over 2021, and increased by 16 percent versus 2020, as the effect of continued lockdowns hampered the recovery of demand together with the longer delivery times.

Growth in the USA was 4 percent compared to 2021 and 71 percent against 2020. Revenue in the rest of the world decreased by 10 percent on the prior year to 109.2 million pounds and increased by 5 percent against 2020, impacted by the delays in the distribution network caused by reduced air freight capacity.

Boohoo Group expects improved sales trends in H2 2023

The group aims returning towards normalised growth rates of 25 percent per annum post pandemic and adjusted EBITDA margin rebuilding back to 10 percent.

For the financial year ending 28 February 2023, the group anticipates that revenue percentage growth will be low-single digits, and adjusted EBITDA margins for the year are expected to be between 4 percent to 7 percent as the group expects to continue to be impacted by pandemic-related factors that negatively impact costs within its supply chain and international competitive proposition.

For the first half of FY2023, adjusted EBITDA margins are expected to improve from the level achieved in the second half of H2 FY2022. Performance is expected to improve in the second half of the year with sales growth accelerating as the group annualises high returns rates and normalising consumer demand, with profitability improving as it benefits from key strategic initiatives and leveraging of overheads.