For the six months to August 31, Boohoo Group’s net revenue declined 10 percent to 882.4 million pounds amid “macro-economic headwinds facing both consumers and businesses”.
The company said it expects for a similar rate of revenue decline to persist over the remainder of the financial year if the “current conditions” continue.
Boohoo now anticipates adjusted EBITDA margins to be between 3 percent and 5 percent, compared to the previously guided range of 4 percent and 7 percent.
Group CEO John Lyttle said: “Performance in the first half was impacted by a more challenging economic backdrop weighing on consumer demand.
“We have a clear plan in place to improve future profitability and financial performance through self-help via the delivery of key projects, which will stand us in good stead as macroeconomic headwinds ease.”
Highlights of Boohoo first half results
The company said in a release that gross revenue before returns increased 4 percent, reflecting underlying growth and ongoing improvements in average order frequency and spend per customer, offset by weaker than anticipated consumer demand.
Meanwhile, UK revenues declined 4 percent, softening through the second quarter as inflationary pressures increased and consumer demand was impacted by cost of living pressures.
International revenues declined 17 percent, with the proposition continuing to be impacted by extended delivery times. Markets such as Australia are starting to see improvements from reduced delivery times, with lower rates of year-on-year declines in revenues as the first half progressed.
Gross margin of 52.5 percent was down 210 basis points year-on-year, but improved 210 basis points versus the second half of the prior financial year due to tighter inventory management.
The company’s adjusted EBITDA was 35.5 million pounds, with margin at 4 percent.