Boohoo Group's revenue dropped 17% to £1.46bn ($1.82bn) in the 12 months ended 29 February 2024 (FY24) compared to £1.77bn the year before.

The retailer believes this reflected its increased focus on profitability and difficult market conditions with revenue growth also impacted by the growth of its marketplace with its commission-only revenue model.

Gross profit was down 16% to £756.1m from £895.2m the year before. Gross margin was 51.8% up 120bps compared to FY23, which reflected the growth of its marketplace and impact of its cost savings programme and freight and raw material price decreases.

Adjusted EBITDA margin improved to 4% up 40bps compared to FY23, which it said reflected improvements in gross margin, cost reduction initiatives and value unlocked from automation investment. Adjusted EBITDA of £58.7m was down 7% compared to FY23.

Boohoo Group CEO John Lyttle said: "We have a highly loyal customer base and throughout the year we remained focused on maintaining our position as an industry leading, fashion-forward group with brands that deliver on-trend, high quality fashion at great value prices. The strength and diversity across our core brands means the group is well placed to serve a global customer base across fashion, beauty and home."

He also pointed out the retailer had made "continued progress" despite difficult market conditions, caused by high levels of inflation and weakened consumer demand.

"I am particularly encouraged with the ongoing trend of improved performance in our core brands which saw gross merchandise value (GMV) down 9% in H124 and down just 4% in H224 demonstrating increasing momentum and validating our strategy to focus on these brands which are much loved by our customer base," Lyttle said.

He added the retailer is continuing to take actions to deliver on its goal of bringing the entire group back to profitable growth.

Lyttle explained: "In FY24, we completed our investment cycle with the launch of our US distribution centre and the successful delivery of our Sheffield Automation project. Sheffield is already delivering significant efficiency improvements, which, together with the traction of Debenhams marketplace, is generating margin improvement across the group."

Boohoo has also taken steps to transition several of its labels over to its Debenhams marketplace in a bid to drive enhanced profitability.

Lyttle believes this proved effective during the year and is something that will drive additional profitability going forward.

Boohoo FY24 key results

• Revenue for FY24 declined 17% to £1.46bn from £1.77bn the year before.
• Adjusted EBITDA was down 7% to £58.6m from £63.3m the year before and adjusted EBIT was down 24.9% to -£18m from £6.9m the year before.
• The company's loss for the year was down 82% to -£137.8m from -£75.6m the year before.

Boohoo's FY25 outlook

Lyttle believes improved market conditions gives the retailer strong confidence in its medium-term outlook.

• Boohoo Group is targeting GMV growth, as well as continued improvements in adjusted EBITDA margin
• It remains confident in its 6-8% medium term EBITDA margin target
• In FY25 it will continue to leverage the increasing efficiencies generated by its investment in automation and capacity with an ongoing focus on cost reduction. It remains on track to deliver annualised cost savings of £125m across cost of goods, supply chain and overheads in FY25
• Significant capital expenditure reduction expected in FY25 with investment cycle now complete
• The group expects to generate positive free cash flow in FY25.

Lyttle added: "The group is now well positioned to return to growth, and we are focused on ensuring that growth is both sustainable and profitable. We will host a capital markets day in due course to provide more detail on our strategy, key growth drivers and the longer-term outlook for the group."

Boohoo said it is moving towards closing the loop on circularity during a UK parliament evidence session last week.