Online fashion retailer Boohoo has today reported a 7% fall in annual core earnings at the bottom end of guidance after revenue dropped 17%, which it said reflected difficult market conditions and a strategy to target more profitable sales.
The group, like UK peer ASOS, was a winner during the Covid pandemic which drove a boom in online shopping.
It has struggled since, hurt by supply chain issues, higher product returns, competition from rivals such as Shein and weakened consumer demand.
Shares in Boohoo, 22% of which are owned by Mike Ashley's Frasers Group, were down about 5% today, extending their year-on-year decline to 22%.
The group, whose brands include PrettyLittleThing, Karen Millen and Debenhams, posted an adjusted EBITDA, its preferred profit measure, of £58.6m in the year to February 29 compared to guidance of £58-70m and the £63.3m it made in 2022/23.
At the statutory level, Boohoo's pretax loss swelled to £159.9m from a loss of £90.7m.
Boohoo said it had made progress in repositioning the group for sustainable, profitable growth and remained confident in its medium term EBITDA margin target of 6% to 8%, up from 4% in 2023/24.
It said it would continue to leverage increasing efficiencies generated by investment in automation.
In 2023/24 Boohoo invested £64.8m in infrastructure, including a major automation project at its warehouse in Sheffield and in a new distribution centre in the US.
It said it was on track to deliver annualised cost savings of £125m in 2024/25 and it also forecast positive free cash flow in the year.
CEO John Lyttle said he had "strong confidence in our medium-term outlook".
Last month, ASOS reported a first-half loss but said it expected to report positive core earnings for its full 2023/24 year.
Online fashion marketplace Zalando earlier this week said it had returned to growth in its first quarter.
