High Street

Boohoo announces sales drop amid cost of living crisis

Gross demand growth was up 9% year-on-year, with net sales impacted by the ongoing normalisation of returns due to product mix change

Boohoo has announced that its revenues declined 8% in the first quarter of 2022, but are up 75% over the three-year pre-pandemic period reflecting multi-year market share gains across the Group’s multi-brand platform.

Gross demand growth was up 9% year-on-year, with net sales impacted by the ongoing normalisation of returns due to product mix change.

Underlying gross demand grew 21%, however its International performance continued to be impacted by increased delivery times.

Gross margin for the three months 52.8%, down 220bps against a strong prior year comparative, but up 240bps against the second half of the previous financial year, and improved through the quarter.

The group said its outlook for the year ending 28 February 2023 remains unchanged, with revenue growth for FY23 expected to be low-single digits, with a return to growth in Q2 and growth rates improving in the second half of the year.

It added that adjusted EBITDA margins are expected to be between 4% and 7%, in line with prior guidance, as the group said it “continues to be affected by pandemic-related and inflationary factors that negatively impact costs within its supply chain and international competitive proposition”.

John Lyttle, CEO, said: “I am pleased with the progress we are making towards our strategic priorities, which is already having a meaningful impact operationally within the business.

“We have seen promising signs from the Group’s sales performance in the UK, which has improved month-on-month in the period and we are looking ahead towards
our key summer trading season as holidays ramp up and customers look to the latest fashion from across our brands.”

He added: “Looking forward, we will continue to focus on optimising both our financial and operational performance to ensure the business is well placed to take advantage of future growth opportunities.”

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