27th Sep 2016 07:27
LONDON (Alliance News) - boohoo.com PLC on Tuesday raised its guidance for full-year revenue, after achieving growth in profit in the first half of its financial year.
The online fashion retailer said its pretax profit in the six months ended August 31 more than doubled to GBP14.4 million from GBP6.3 million the year before, as revenue rose to GBP127.3 million from GBP90.8 million.
By region, revenue in the UK grew by 38%, while the rest of Europe increased by 41%, the US was up by 93% and the rest of world increased by 17%. boohoo said the number of active customers rose by 28% to 4.5 million, with growth driven by a broader product range.
As a result, boohoo now expects full-year revenue to grow by between 30% and 35% year-on-year.
Gross margin, however, declined by 480 basis points in the first half to 55.3% due to planned investments in price and promotions.
"Following the success in the first half of the year we will continue to look for opportunities to invest in marketing campaigns and our customer proposition to drive future sales growth and improve customer lifetime value. We will also be making significant investments in our IT systems and e-commerce platforms. Consequently earnings before interest, tax, depreciation and amortisation margin for the full year is expected to be around 11%," joint-Chief Executives Mahmud Kamani and Carol Kane said in a statement.
boohoo added that currency exchange movements since the UK voted to leave the European Union have not significantly affected its results, due to foreign exchange hedges placed in advance. It added, however, that weaker sterling provides the opportunity to use promotional activity to generate incremental international sales over and above hedged transactions.
"With an element of many product prices being dollar-based, it remains to be seen what the longer term effect of continued sterling weakness might be in the supply chain," the company said.
Shares in boohoo were trading down 0.2% 97.56 pence on Tuesday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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