The British online fashion retailer made adjusted EBITDA of 173.6 million pounds
British online fashion retailer Boohoo reported a 37% jump in annual core earnings, benefiting from the rise in digital shopping during the pandemic and weathering the negative publicity over its supply chain failings.
In September, Boohoo accepted all the recommendations of an independent review that found major failings in its supply chain in England after allegations about working conditions and low pay in factories in the Leicester area.
The group, which sells clothing, shoes, accessories and beauty products aimed at people aged 16 to 40, pledged to fix the problems with its ‘Agenda for Change’ programme. In March, it revealed a major consolidation in its list of British suppliers.
Boohoo made adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of 173.6 million pounds in the year to Feb. 28, exceeding analysts’ average forecasts and the 126.6 million pounds made in the 2019-2020 financial year.
Unlike rivals that rely on stores which had to shutter for several months during pandemic-induced lockdowns, Boohoo was able to trade throughout, helping push revenues up 41% to 1.75 billion pounds.
We’ve had extremely strong customer retention through the period. That’s very reassuring, finance chief Neil Catto told Reuters. But I think customers appreciate all the work we’ve done on the Agenda for Change and the progress we’ve made there.
In January, Boohoo purchased the Debenhams brand out of administration for 55 million pounds and in February bought the Dorothy Perkins, Wallis and Burton brands from the administrators of Arcadia for 25.2 million pounds.
Boohoo forecast revenue growth for the 2021-2022 financial year of about 25%, with the newly-acquired brands expected to deliver five percentage points of this growth.
It said trading in the first few weeks of the new financial year had been encouraging as pandemic restrictions eased.
But it cautioned that the economic outlook remained uncertain and it expected the benefits from reduced returns over the last 12 months to begin to unwind this year, while still experiencing significantly higher carriage and freight costs.
Shares in Boohoo were down 0.6% at 0831 GMT.
It said core earnings would likely be more weighted to the second half, reflecting a strong comparative in the first half.
The articles are for information purposes only and Precise Investors shall not be held responsible for any errors, omissions or inaccuracies within it. Any rules or regulations mentioned within the website are those relevant at the time of publication and may not be the most up-to-date.
Precise Investors does not endorse any of the products or services that appear on it or are linked to it and are not liable for any action that you may take as a result of the content of this website, or losses or damage you may incur doing so.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.
Please remember that investments of any type may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.