Boohoo raises full-year revenue forecast as half-year sales soar

Manchester based fast fashion group, Boohoo has reported first-half profits ahead of analysts’ expectations and raised its full-year forecasts, just days after a report found the company lacked adequate oversight of its supply chain.

Boohoo Group's profit before tax increased 51% year on year to £68.1m in the six months to 31 August 2020, despite the retailer experiencing some of its “most challenging times”.

Adjusted EBITDA rose 48%, to £89.8m, in the period, compared to the same six months in 2019.

Revenues were up 45% to £816.5m, as a result of strong revenue growth across all global markets and brands. International revenue grew by 55%, whilst UK revenue was up by 37% and US revenue increased by 83%.

Boohoo said it now expected revenue growth of 28% to 32% for the full year, up from previous guidance of 25%.

Adjusted EBITDA margin for the year is expected to be around 10%, up from the 9.5% to 10% that had previously been forecast.

The group closed the six-month period in 2020 with a net cash balance of £344.9m, compared to £207.3m in 2019.

The company added that its planning included expectations of growing economic uncertainty “including possible reduced consumer spending” as well as more normal return rates and higher shipping costs to overseas market.

John Lyttle, Boohoo Group CEO, said: “Our business, along with many others, has faced some of its most challenging times in recent months: the onset of the pandemic meant we had to adapt our operations with nearly all office-based colleagues working from home; we introduced new ways of working safely in our distribution centres; and we have comprehensively investigated reports on concerning and unacceptable working practices in our Leicester supply chain."

“Immediately after the media reports regarding Leicester garment factories that supply the group, we commissioned an independent review, headed by Alison Levitt QC, to investigate the allegations of low pay and the extent of the group’s knowledge of the allegations, to establish the group’s compliance with the law and to make recommendations for the future."

"We published that report on 25 September and we have established a programme to implement the recommendations of the report to make substantive, long-lasting and meaningful change that all stakeholders in the Boohoo Group will benefit from. We will keep shareholders updated on our progress."

“There are many challenges still ahead due to uncertainties posed by the Covid-19 pandemic, but despite these challenges there are many positives from our activities in the first half. The resilience of our business model and the commitment and flexibility of our colleagues and partners has enabled us to continue to operate our business successfully."

"We are grateful to all and pleased to be able to report a strong performance with continued high-growth rates in revenue and strong profitability. We also acquired two new well-known women’s brands, Oasis and Warehouse, and we acquired the remaining minority interest in PrettyLittleThing, all of which will support our continued growth and profitability."

"The group has continued to gain market share in all key markets and we remain optimistic about the group’s prospects with the belief that it is well-positioned to continue making progress towards leading the fashion ecommerce market globally.”

Boohoo did not add further comments about the independent review on its governance policy published on Friday, noting all its actions to implement the recommendations were announced last week.

Richard Hunter, head of markets at interactive investor, said the scandal over the firm’s supply chain has “done little to harm Boohoo’s profits or prospects”.

He cautioned the group’s measures in response to the report “will, of course, come at a cost and the possibility of wider investigations cannot be ruled out”.

“However, any reputational damage caused by the allegations has not filtered through to a very strong set of numbers,” he added.