Briton Boohoo warns of profits for second time in four months

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A woman poses with a smartphone showing the Boohoo app in front of the Boohoo logo displayed in this illustration taken on September 30, 2020. REUTERS / Dado Ruvic / Illustration / File Photo

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  • Reduces sales and margin forecasts
  • Blame higher returns, extended international delivery times
  • Equities down 12.6%

LONDON, Dec.16 (Reuters) – British online fashion retailer Boohoo (BOOH.L) on Thursday warned of annual profit for the second time in four months, accusing higher product return rates, a disruption international deliveries and cost inflation linked to COVID-19.

He said the new variant of the Omicron coronavirus could lead to additional demand uncertainty and high return rates, particularly in January and February.

Shares of the Manchester, northern England-based group, which sells clothing, shoes, accessories and beauty products aimed at 16-40 year olds, fell 12.6% as of 08:24 GMT, bringing losses from 2021 to 65%.

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Boohoo sought to improve its image after negative publicity over supply chain failures, but had warned of the outlook for the full year in September. Read more

The group said it expected net sales growth in the year through February 28, 2022 to be 12% to 14%, compared to previous forecasts of 20% to 25%.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the year is expected to be 6% to 7%, compared to previous guidance of 9% to 9.5%, implying Adjusted EBITDA of between 117 and 139 million pounds ($ 155.2- $ 184.4 million), down from the 173.6 million pounds made in 2020-21.

“This is due to significantly higher return rates impacting net sales growth and costs, with continued extended delivery times impacting international demand, resulting in lower returns on expense. marketing and continued inflation in inbound freight costs linked to the pandemic, ”he said.

Return rates across the industry were low during pandemic shutdowns, but increased as consumers sought more second-hand clothing as restrictions eased.

Trading update for the three months to November 30, Boohoo said gross demand exceeded that achieved in each of the first and second quarters. Gross sales increased by 28% and net sales by 10%.

The group said its guidance for the full year reflected an expectation that factors affecting its performance would persist for the remainder of the year.

Boohoo also reported an increase in exceptional items for the year of around 33 million pounds, up from 22.5 million previously, mainly due to warehouse restructuring and the new brand.

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Reporting by James Davey, editing by Paul Sandle and Barbara Lewis

Our Standards: Thomson Reuters Trust Principles.


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