• Group total revenue up 43% to GBP564.9m (US$702.1m).
  • Gross margin narrows 100 basis points to 54.3%.
  • Profit before tax soars 83% to GBP45.2m. 
Group total revenue jumped 43% in the period to GBP564.9m (US$702.1m) from GBP395.3m a year earlier

Group total revenue jumped 43% in the period to GBP564.9m (US$702.1m) from GBP395.3m a year earlier

Boohoo has hailed a 43% surge in group sales for the first half of the year in a move that means revenue at the online fashion retailer has exceeded GBP1bn in the last 12 months for the first time in its history.

In the six months to the end of August, group total revenue jumped to GBP564.9m (US$702.1m) from GBP395.3m a year earlier. Strong revenue growth was seen across all brands and geographies with UK sales up 35% and international up 55%. International now represents 44% of group revenue.

Sales at the retailer's namesake brand were up 34% to GBP281m with market share gains in all focus markets, while at PrettyLittleThing, revenues reached GBP237.6m, up 41% on the prior year. Meanwhile, sales at Nasty Gal soared 148% to reach GBP43.9m.

In March, Boohoo acquired the MissPap brand and in August, the Karen Millen and Coast brands, all of which it said are complementary to the group's scalable multi-brand platform.

"These investment propositions have helped us grow from a single brand, into a major multi-brand online retailer, leading the fashion eCommerce market for 16 to 40-year-olds around the world," it added.

While sales for MissPap were not stated, Boohoo said revenue from the label is "starting to grow rapidly" since go-live in April, noting Karen Millen and Coast will commence trading online in October.

Gross margin, meanwhile, narrowed 100 basis points to 54.3% from 55.3% in the prior-year period, while profit before tax soared 83% to total GBP45.2m for the six months to 31 August.

CEO John Lyttle notes it has been a "fantastic" first-half of the year for the group.

"For the first time in our history, revenue has exceeded GBP1bn in the last 12 months" - John Lyttle, Boohoo CEO

"We have delivered significant market share gains across all of our key markets, and for the first time in our history, revenue has exceeded GBP1bn in the last 12 months," he adds. "We have delivered strong growth and operating leverage in our more established brands and will continue to invest in both our more established and newly-acquired brands.

"We enter the second half of the year well-placed and confident that our platform, which combines the latest fashion, great prices and excellent customer service, all underpinned by a well-invested infrastructure, will deliver further market share gains."

Looking ahead, Boohoo reiterated its guidance as per its 5 September announcement in which it said group revenue growth for the year to 29 February 2020 is expected to be 33% to 38%. This compares with previous guidance of 25% to 30%.

EBITDA margins for the year are expected to remain at around 10% in-line with earlier forecasts, reflecting anticipated investments into the three brands acquired by the group in the first half. 

"Growth other retailers can only dream of"

Emily Salter, retail analyst at GlobalData, notes Boohoo continues to defy the gloom of the UK retail sector, yet again reporting "impressive" revenue growth as its young shoppers are undeterred from spending on fashion despite economic uncertainty. 

"Celebrity and influencer collaborations are a key part of the group's marketing strategy, and it was one of the many young fast-fashion retailers to sign this year's Love Island stars, with every brand apart from Nasty Gal gaining an ambassador from the show," she says. 

Meanwhile, Salter says the acquisitions of premium womenswear brands Karen Millen and Coast are a "far cry" from the group's previous young fast-fashion acquisitions.

While this provides the group with a means of extending its reach, which is no bad thing due to the competition in the youth value clothing market, Salter says the acquisition risks devaluing Coast and Karen Millen as they rely on "high-quality product and sophisticated designs", in contrast to Boohoo's dependence on repeated discounts and huge product ranges.

"Boohoo must protect their positioning as premium brands, which will require investment in product quality and fit, but this is integral for the acquisition's success. The group only bought the online businesses of the two brands, which will relaunch on the group's platform on 1 October, and the loss of physical stores will be detrimental to sales due to their focus on occasionwear. The Boohoo Group's dexterity at marketing, especially on social media, should be used to inject renewed life into Karen Millen and Coast and acquire new customers – something the group is good at and is what the two brands need.''

Greg Lawless, analyst at Shore Capital, meanwhile, adds Boohoo has "real momentum and continues to win market share globally."

"The recent acquisitions in Karen Millen and Coast broadens the product range into older demographics group and increases the potential addressable market that the group can serve," he says. "Boohoo is our top pick amongst the clothing retailers and we highlight the international prospects of the business (now 44% of group revenues), growth across all brands, strength of the balance sheet and the opportunity to scale the recent acquisitions through the group's multi-brand platform."