EconomyEditor's PickNewsBuoyant Boohoo lifts profit despite supply chain scandal

2 years ago476 min
imageTechnology59 minutes ago (Sep 30, 2020 05:06AM ET)


(C) Reuters. FILE PHOTO: A shopper walks pass advertising billboards for Boohoo and for ‘Pretty Little Things’, a Boohoo brand, at Canary Wharf DLR station in central London


By James Davey

LONDON (Reuters) – Boohoo reported a 51% increase in first half profit and raised its full year guidance on Wednesday, with publicity over failings in its supply chain showing no impact on the British online fashion retailer’s sales.

Last week, Boohoo accepted all the recommendations of an independent review which found several failings in its supply chain in England after allegations about working conditions and low pay, setting out steps to tackle the problems.

Boohoo, which sells own-brand clothing, shoes, accessories and beauty products targeted at 16- to 40-year-olds, has been under intense scrutiny since July when the allegations surfaced after a lockdown during the coronavirus pandemic.

Unlike store-based rivals who had to shutter shops for several months during coronavirus lockdowns, Boohoo was able to trade throughout the first half and said it had made a good start to the second, with momentum continuing into September.

“Boohoo has shrugged off the supply chain scandal and strutted ahead with strong revenue growth across all its brands and markets,” Hargreaves Lansdown (LON:HRGV) analyst Susannah Streeter said.

Boohoo shares were down 2.6% at 0753 GMT, but have recovered all their losses from July when the supply issues emerged and are up 27.5% in 2020.

The group made a pretax profit of 68.1 million pounds ($87.4 million) in the six months to August 31, on revenue up 45% to 816.5 million pounds.

Revenue for 2020-21 was now expected to grow by 28% to 32% versus approximately 25% previously guided, while core profit margin (adjusted EBITDA margin) was expected to be around 10%, versus 9.5% to 10% previously forecast.

Boohoo said it is planning for economic uncertainty in the second half, including possible reduced consumer spending.

It also anticipates product return rates returning to normal levels, continued delivery cost inflation in some overseas markets and increased marketing and capital expenditure.

Buoyant Boohoo lifts profit despite supply chain scandal

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Leave a Reply

Your email address will not be published. Required fields are marked *