Following today’s release of boohoo group H1 figures for FY2020/21, Emily Salter, Retail Analyst at GlobalData, a leading data and analytics company, comments:
“The boohoo group has emerged from the first wave of COVID-19 and resulting economic uncertainty unscathed, with sales growth accelerating versus last year as its flexible marketing and product proposition allowed its key brands to adapt well to the crisis and subsequent shift of sales online. This morning the group increased its full year revenue growth guidance to 23-32% (previous guidance of c25%), and adjusted EBITDA margin of c10%, up from 9.5-10%, proving the resilience of the brands during this period. The USA experienced the strongest growth to reach almost half of UK sales (£202.2m versus £430.2m), driven by PrettyLittleThing and boohooMAN. The group is wise to focus on international markets to grow sales as its key brands start to mature in the UK.
“Unusually, the group has not split out performance by its key brands, but boohoo.com and PrettyLittleThing will have continued to drive the group’s sales growth as they were able to meet demand for more popular categories during lockdown such as loungewear and athleisure, as well as promoting outfits for social events after the easing of restrictions. These brands will still be hit by dampened demand for festive partywear and a reduced need among students to buy clothes for going out, but newer acquisitions Karen Millen and Coast will suffer the most from the impacts of COVID-19 on social events during the festive season, as well as consumers yet again being encouraged to work from home, due to their focus on occasionwear and formalwear.
“The results of the independent review into the group’s Leicester supply chain were released last week, leading to some fairly damning press coverage but a boost to its share price. The review uncovered “many failings” in its supply chain and that the group knew about issues in Leicester since 2019 but failed to respond adequately. The boohoo group’s subsequent action plan is focused on rapidly improving its supplier compliance function and corporate governance, and it is confident it can still deliver its test and repeat model and infamous low prices while improving working conditions and pay. Whether it can do so is paramount as this model and price proposition are key to the group’s success, and in times of economic uncertainty, many consumers will place greater importance on affordability rather than ethics.”