Boohoo ups FY on strong H1 performance - Just Style
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Boohoo ups FY on strong H1 performance

By Giacomo Lee 26 Sep 2018

Online fashion retailer Boohoo has upped its full-year revenue guidance on the back of market-leading growth in all regions in the first half of the year.

Boohoo ups FY on strong H1 performance

Online fashion retailer Boohoo has upped its full-year revenue guidance on the back of market-leading growth in all regions in the first half of the year.

In the six months to the end of August, group total revenue jumped 50% to reach GBP395.3m (US$520.4m) from GBP262.9m a year earlier. Strong revenue growth was seen across all geographies with UK sales up 43% and international up 62%. International now represents 41% of group revenue.

Gross margin, meanwhile, was up 200 basis points to 55.3%.

Sales at the retailer’s namesake brand were up 15% to GBP209m with market share gains in all focus markets, while at PrettyLittleThing, revenues reached GBP68.6m, up 132% on the prior year. Meanwhile, sales at Nasty Gal reached GBP17.7m, up 111% on last year.

Joint CEOs Mahmud Kamani and Carol Kane said group results for the first half year show yet another strong performance, delivering record sales and profits.

“All of our brands performed extremely well across all territories as we continue to gain market share. We achieved market-leading growth in all markets, with Rest of Europe and the USA being particularly pleasing. Growth in the UK, our largest market, remains very strong.”

Kamani and Kane added the group has successfully executed a major relocation of the distribution centre for PrettyLittleThing, which represents a “key milestone” in its plans to develop a distribution network capable of generating GBP3bn of net sales globally, in-line with its vision to lead the fashion e-commerce market.

“This relocation was carried out with a low level of disruption to the operations of PrettyLittleThing and is a credit to the project team,” they said. “Our extended distribution centre in Burnley, which will have a significant element of automation to drive efficiency savings, is scheduled for operational use in 2019.”

Looking ahead, group revenue growth for the year to 28 February 2019 is expected to be 38% to 43%, up from previous guidance of 35% to 40%, with adjusted EBITDA margin between 9% and 10%.

Meanwhile, the retailer reiterated its medium term guidance to deliver sales growth of at least 25% per annum and EBITDA margin of 10%.

Shore Capital analyst Greg Lawless notes Boohoo’s interim results show strong momentum with Pretty Little Thing once again the star performer.

“In our view Boohoo remains strategically well-positioned as a pure play retailer with its focus on fast fashion across its three brands.”

Lawless adds last week’s announcement of a new external CEO – John Lyttle from Primark – along with a new incentive share scheme, is a statement of intent of the ambitions of the group.

Emily Salter, retail analyst at GlobalData, concurs: “Once again online pureplay, the Boohoo group has proven its inherent understanding of its customers as Pretty Little Thing continues to drive impressive growth.”

She adds Lyttle’s appointment will bring a new perspective to the retailer as it aims to continue to drive strong growth as matures.

“Additionally, the focus on automation in the group’s extended distribution site will drive efficiency and position the group well in the future as customers demand quicker delivery options.,” she adds.