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Boohoo sales surge 53% in first quarter
Fast fashion retailer Boohoo.com posted a 53% jump in first-quarter revenue on Tuesday, with strong performances across all geographies and brands as it continues to gain market share.
In the three months to the end of May, total group revenue rose to £183.6m from £120.1m the year before. Revenue in the UK increased 49% to £110.7m, while US revenues were 75% higher at £31.4m, Rest of Europe was 82% higher at £22.3m and Rest of World sales rose 24% to £19.2m.
Revenues at Boohoo were 12% higher at £97.2m, but PrettyLittleThing and Nasty Gal were the standout performers, with revenues there up 158% and 149% to £79.2m and £7.2m, respectively.
For the full year, the group continues to expect revenue growth to be 35% to 40%, with adjusted EBITDA margin between 9% and 10%. All other guidance for the current financial year and its medium-term guidance to deliver sales growth of at least 25% a year and 10% EBITDA margin were unchanged.
Joint chief executive officers Mahmud Kamani and Carol Kane said: "We are very pleased with the group's results for the first quarter of the financial year. Our multi-brand strategy is delivering above-market rates of growth globally. Significant market share gains have been achieved in all of our key focus markets, with our compelling combination of the latest fashion at incredible prices, backed by great customer service resonating strongly with our customers. The scale of group revenue is aligning with our ambition to become one of the dominant global online retailers and our focus on profitability continues to deliver industry-leading margins.
"Our infrastructure continues to see record levels of investment as we invest ahead of our growth curve and develop a distribution network capable of supporting £3bn of net sales globally. The distribution centre extension and automation project at Burnley remain on track to complete towards the end of the financial year, with PrettyLittleThing's move to its own warehouse expected to complete early in the second half of the financial year."
At 0900 BST, the shares were down 2.9% to 213.70p.
Independent retail analyst Nick Bubb said: "Some may grumble that the growth is heavily skewed to the recently acquired PrettyLittleThing subsidiary (with core Boohoo only 10% up in sales) and that the company hasn't raised its full-year guidance."
Meanwhile, Liberum said first-quarter revenue was ahead of expectations but downgraded its stance on the stock to 'hold' from 'buy' saying the shares are up with events.
The brokerage, which left its price target at 220p, said: "Our reduced recommendation is reflective of a) a valuation that we believe to be up with events and b) the fact that the competition (i.e. ASOS and Zalando) continue to invest in their own businesses more heavily in percentage terms, which we see as a potential threat to boohoo in the longer term at a time where the race is on to acquire new customers."