3rd Oct 2023 08:45
(Alliance News) - boohoo Group PLC posted a wider loss and a revenue fall in its first-half, but it said on Tuesday that it believes it has a "clear path to improved profitability and getting back to growth".
The AIM listing cut annual revenue guidance, however.
The stock tumbled 8.1% to 29.03 pence each in London on Tuesday morning.
For the six months ended August 31, revenue fell 17% to GBP729.1 million from GBP882.4 million a year prior. The fast fashion firm's pretax loss stretched to GBP26.4 million from GBP15.2 million.
boohoo said consumer demand was hurt by tough economic conditions.
Chief Executive John Lyttle said: "Over the first half, we have made substantial progress across key projects and initiatives, including the launch of our US distribution centre. We have seen significant improvements in sourcing lead times and invested in pricing to reinforce our value credentials. We have identified more than GBP125 million of annualised cost savings that support our investment programme. Our confidence in the medium-term prospects for the group remains unchanged as we execute on our key priorities where we see a clear path to improved profitability and getting back to growth."
Looking to the full-year, boohoo now predicts its revenue will decline between 12% and 17% from GBP1.77 billion achieved the year prior. This is due to the "slower volume recovery than previously anticipated" and the company plotting "more profitable sales within our labels". Its previous revenue forecast ranged from a flat outcome to a 5% decline.
boohoo's adjusted earnings before interest, tax, depreciation and amortisation margin is still expected to land between 4% and 4.5%. Its first-half adjusted Ebitda margin improved to 4.3% from 4.0% a year earlier.
boohoo added: "The board's confidence remains unchanged in rebuilding profitability over the medium term, generating a 6% to 8% adjusted Ebitda margin while getting back to growth through: continued investment in product, price and proposition, volume growth, international expansion, unlocking cost deflation; and cost control."
By Eric Cunha, Alliance News news editor
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