Boohoo earnings rise 37% as pandemic boosts online shopping

UK’s Boohoo forecasts revenue growth for 2021/22 of around 25%

Homepage of the official website for the clothing brand Boohoo                                 

UK online fashion retailer Boohoo reported a 37% rise in full-year core earnings, bolstered by the surge in online shopping during the COVID-19 pandemic as shops were temporarily shut.

The group, which sells clothing, shoes, accessories and beauty products, reported adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of £173.6m ($241.4m, €201,3m) in the year to 28 February.

That was ahead of analysts’ average forecast of £171.3m and more than £126.6m made in the 2019/20 financial year.

Group revenue rose 41% to £1.75bn ($2.43bn,€2.03bn). It benefitted from strong sales performances in both the domestic and international markets. UK sales rose 39%, while overseas sales were up 44%.

Supply chain concerns

Boohoo was able to trade throughout the pandemic, despite publicity criticising its supply chain. In September, Boohoo accepted all the recommendations of an independent review that found failings in its supply chain in England, following allegations about working conditions and low pay in factories in the Leicester area.

In March, the group revealed a major consolidation in its supplier base and published a full list of British manufacturers to meet a pledge on transparency.

In January, Boohoo bought the Debenhams brand out of administration for £55m and in February bought the Dorothy Perkins, Wallis and Burton brands from the administrators of Arcadia for £25.2m.

Moving forward

Boohoo forecast revenue growth for the 2021/22 year of around 25%, with the newly-acquired brands expected to contribute approximately five percentage points of this growth.

It said trading in the first few weeks of the new financial year had been ”encouraging“.

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 show this year.

Read more: British businesses enjoy fastest growth rate since 2013

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