Boohoo raises outlook on strong Q1 revenue growth

Boohoo Group revenue for the three months to May 31, 2017 of 120.1 million pounds (155 million dollars) were up 106 percent against 58.2 million pounds (75 million dollars), the company reported last year. Like-for-like revenue growth was 78 percent, while gross margin was 54.2 percent compared to 56 percent last year.

Commenting on the company’s performance, joint Chief Executives Mahmud Kamani and Carol Kane said in a statement, “Our performance in the first quarter has been very encouraging across all brands and geographic regions. While it is early in the financial year, boohoo continues to perform well, PrettyLittleThing delivered exceptionally strong revenue growth and Nasty Gal has made a promising start since we acquired the brand.”

Boohoo revenues witness a 48 percent jump

Boohoo brand revenue of 86.4 million pounds (111 million dollars) in the first quarter, increased 48 percent or 44 percent CER, while revenues in the UK were up 41 percent. Sales in rest of Europe rose 44 percent or 33 percent CER, in the USA, 97 percent or 83 percent CER, and in rest of world, 50 percent or 34 percent CER.

The company said gross margin was 53.9 percent, down 230 bps, driven by planned investments in the customer proposition, while there was a 24 percent jump in active customers to 5.2 million. Boohoo Group said that sales at PrettyLittleThing of 30.7 million pounds (39.7 million dollars) increased 305 percent on like-for-like basis. Nasty Gal revenue stood at 2.9 million pounds (3.7 million dollars).

The company expects the construction of its second warehouse extension at its Burnley site to be complete in early 2018, adding 900,000 sq. ft. of storage to the existing 996,000 sq. ft. providing sufficient capacity for a 1 billion pounds (1.2 billion dollars) net sales operation. The company has announced plans to construct a new automated super-site of over 600,000 sq. ft., which it says, will provide Boohoo with over 2 billion pounds (2.5 billion dollars) of net sales capacity. The group also announced separately an equity placing to raise 50 million pounds (64 million dollars), which together with the group’s cash generation, is expected to fund capital expenditure requirements.

Full year sales growth expected to touch 60 percent

Following a strong trading momentum in Q1, Boohoo Group now expects group revenue growth for the full year to February 2018 to be around 60 percent, ahead of previous guidance of revenue growth approaching 50 percent. The company expects group EBITDA margins to be in line with previous guidance at around 10 percent.

Revenue growth from the boohoo brand is expected to be 25 percent to 30 percent year on year. Revenue growth from the PrettyLittleThing brand is expected to be approximately 75 percent above the 12 month revenue to February 28, 2017 of 55 million pounds (71 million dollars). The balance of the growth to around 60 percent is expected to come from the Nasty Gal brand.

Picture:Boohoo website