Boohoo delivers good news on trading, hails strong performance
Boohoo Group issued a trading update on Thursday and said that sales grew 7% in Q4 compared to a year ago but were up a giant 48% on a two-year, pre-pandemic, basis.
It came as a welcome relief to the company's under-pressure share price as the shares rose in double-digits in early trading after having fallen sharply in recent months.
The three months to the end of February were pitched against tough comparisons given that the UK was in lockdown a year ago and online specialists such as Boohoo benefited hugely from this.
The company also said that for the full year, it saw revenue growth of 14% on a one-year basis and 61% against the 12 months before the pandemic started. Its figures were in line with its guidance.
It said that gross sales growth was strong in the fourth quarter, rising 26% compared to the previous year and 57% on a two-year basis. But as expected, net sales growth in the quarter was impacted by higher returns rates due to the changing product mix. This issue is expected to continue in the first half of the current financial year.
In its domestic UK market, the owner of brands including Boohoo, PrettyLittleThing, Nasty Gal, Debenhams and Karen Millen, said it continued to deliver a strong trading performance.
However, its international performance continued to be hurt by longer customer delivery times due to pandemic-related supply chain pressures. That's a major problem for the business as, by definition, fast fashion has to be delivered to consumers quickly and if they face long delivery times from international sellers, they're more likely to go to domestic retailers offering similar products.
That said, the company added that Q4 saw it returning to growth in the rest-of-the-world region due to the positive contribution from wholesale.
Boohoo will report its adjusted EBITDA for the financial year in early May and expects a figure of around £125 million, which would meet the guidance issued in December.
CEO John Lyttle said: “The group has delivered strong growth over the last two years, which has translated into significant market share gains. We are confident that pandemic-related headwinds are short-term in their nature, and our focus is to ensure the business is well positioned for growth as these headwinds ease.”
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