Boohoo suffers coronavirus sales hit after bumper year
Boohoo Group today posted a huge surge in revenue and profit for the full year but warned the outbreak of coronavirus had hit growth in March.
The figures
Boohoo’s revenue rose 44 per cent to £1.2bn in the year to the end of February 2020.
Pre-tax profit jumped 54 per cent to £92.2m.
Net cash at year end increased by £50m to £240.7m.
Earnings per share rose from 4.12p to 5.88p.
Why it’s interesting
Boohoo, which also owns Pretty Little Thing and Nasty Gal, has posted a strong set of results for the 12 months leading up to the coronavirus outbreak.
The fashion retailer boosted its revenue both in the UK and across international markets, which now make up 45 per cent of total sales.
The increase was also consistent across its portfolio. Boohoo and Pretty Little Thing revenue were both up 38 per cent, while Nasty Gal more than doubled its revenue to almost £100m.
All three platforms posted higher customer numbers, though gross margin dipped as the company invested in the brands.
Boohoo also expanded its women’s fashion empire with the acquisition of Miss Pap, Karen Miller and Coast.
The company, which often promotes its brands using celebrity endorsements on social media, said the automation of its distribution centre had also ramped up its ability to fulfil orders.
Shares in the fashion house were up more than five per cent in early trading.
Despite the positive year of trading, Boohoo was not immune to the outbreak of coronavirus, which it said prompted a “marked decrease” in year-on-year growth in March.
However, the company reported an improvement in recent weeks, with improved year-on-year sales in April.
Boohoo did not give guidance for the financial year, but said it would not recommend a dividend so that cash could be retained in the company.
John Moore, senior investment manager at Brewin Dolphin, said Boohoo’s strong cash position would be crucial as online retailers were forced to write off stock as a result of lower sales.
“Despite the mixed immediate trading environment, Boohoo should be in a strong position to weather the storm given its low-cost structure, shorter lead times, and cash to invest when normality returns,” he said.
Boohoo today said it has appointed JD Sports bigwig Kath Smith to the board as a non-executive director.
What Boohoo said
Chief executive John Lyttle said: “Whilst recent events have understandably overshadowed what has been a great year for boohoo, they have also highlighted its key strengths.
“Our business is founded on our ability to be agile and flexible and it is at times like this when these abilities are tested, and I am proud of how our colleagues and business partners from around the world have responded to the challenges posed by this pandemic.
“Although there is near-term uncertainty in the markets that we operate in, the group is underpinned by its incredibly strong balance sheet and is well-placed to leverage its scalable multi-brand platform and to continue to disrupt fashion markets around the world.”