Boohoo has reported an 11% fall in year-on-year sales as online shopping adjusts to a new post-pandemic normal.
The pureplay fashion retail group, whose brands include Karen Millen, Coast, Warehouse, Oasis and Dorothy Perkins, also says that its sales in the four months to December 31 2022. were 35% higher than in the same period in 2019
Group revenues came in at £637.7m during the period. That’s 11% down on the same time last year. Sales were down across all its markets, from the UK (-11% to £400.8m) and the rest of Europe (-11% to £73.5m) to the USA (-17% to £128.9m) and the rest of the world (-15% to £34.5m).
Group sales were also 35% ahead of the same period in 2019 – and 57% ahead in the UK market. US sales were 17% ahead, and Europe sales were 6% ahead. But sales in the rest of the world were down by 9% on 2019.
The retail group says it has seen positive recent signs in the global supply chain that it expects to lower disruption and relieve freight rates. It aims to rebound strongly when conditions get back to normal by investing in its operations and in key strategic projects. In the meantime it is cutting costs through measures including reducing inventory and cutting UK distribution capacity while also launching automation to improve efficiency in its Sheffield distribution centre.
Boohoo Group chief executive John Lyttle says: “Performance in the period is in line with expectations and reflects the normalisation of the channel shift online over the last twelve months, but demonstrates the significant market share gains the group has made over the last three years. Looking ahead, whilst the demand outlook is uncertain due to macro-economic factors, cost inflation is expected to begin to moderate in the second half of the year.
“We have reduced inventory by 27% year on year and with this focus on careful inventory management, strong cost control and cash management, we will continue to drive operational and cost efficiency across the business. The group has continued to invest in key strategic priorities that will enable future growth, and the progress made gives us confidence that as macro-economic headwinds ease it will be well-positioned to rebound strongly.”
Looking ahead
The retail group expects full-year adjusted earnings before interest, tax and one-off costs (EBITDA) to be in line with market expectations, with revenues falling by about 12% in the year to February 28 2023, and a 3.5% adjusted EBITDA margin. It says it had more than £300m in gross cash by the end of December.
Boohoo is currently reported to be consulting on 100 redundancies at the former Arcadia brands – Dorothy Perkins, Burton and Wallis – that it bought in February 2021.
