Boohoo swings to loss, revenues decline by 11 percent

Boohoo Group reported revenue of 1.769 billion pounds, down 11 percent for the year ended February 28, 2023. Revenues increased 43 percent compared to 2020.

Gross margin of 50.6 percent, was down 190 bps versus last year. Adjusted EBITDA of 63.3 million pounds, was down 49 percent, with an adjusted EBITDA margin of 3.6 percent.

The company’s pre-tax loss was 90.7 million pounds or loss per share of 6.13p and adjusted diluted loss per share was 0.02p.

Commenting on the annual trading update, John Lyttle, Boohoo Group CEO, said in a statement: "Over the last three years, the group has achieved significant market share gains. Our confidence in the medium-term prospects for the group remain unchanged, and as we execute on our key priorities we see a clear path to improved profitability and getting back to double digit revenue growth."

Boohoo forecasts flat to 5 percent sales decline for FY24

For the year ending February 28, 2024 (FY24), the company said, revenues are expected to be between flat and a decline of 5 percent, with increased emphasis on driving profitable sales.

In the first half, revenues are expected to decline by 10 percent to 15 percent, while in the second half of the year, the group expects to return to revenue growth as it benefits from the investments being made across price, product and proposition under the back to growth strategy.

Adjusted EBITDA for FY24 is expected to improve year on year as a result of operational gains, cost efficiencies and cost deflation in our supply chain, with adjusted EBITDA margins of 4 percent to 4.5 percent, and adjusted EBITDA of between 69 million pounds to 78 million pounds.

Over the medium term the group is targeting continued improvements in profitability building towards a 6 percent to 8 percent adjusted EBITDA margin and getting back to double digit revenue growth

Boohoo’s performance across key markets

The company’s revenues in the UK market accounting for 62 percent of revenue, was 1,091.5 million pounds declining by 9 percent compared to 2022, while the pre-pandemic three-year growth remained at 61 percent. Gross margin reduced from 49.4 percent to 47.9 percent

The company added that performance in the USA has been below expectations, with revenue declining 19 percent against the prior year, although revenue growth over the three-year period is strong at 38 percent. Gross margin reduced from 61.5 percent to 58 percent.

Boohoo’s revenue in the rest of Europe decreased by 6 percent over 2022, and increased by 10 percent compared to 2020. Gross margin declined from 54.5 percent to 52 percent with profitability continuing to be impacted by elevated freight costs and high distribution costs.

Revenue in the rest of the world has decreased by 2 percent to 107 million pounds and increased by 3 percent compared to 2020. The company saw growth in the marketplace and wholesale sales to its partners in the Middle East and markets such as Australia started to see improvements from reduced delivery times. Gross margin declined from 52.5 percent to 50.7 percent.