Boohoo takes flight as sales and profits soar on UK and global strength
today Apr 25, 2019
Boohoo delivered a powerful set of final results on Wednesday to show just how much money can be made from selling affordable fast-fashion online.
Just look at the figures for the year to the end of February: revenue up 48% to £856.9m (or 47% currency-neutral); gross profit up 53% to £469m and gross margin up 190bps to 54.7%; adjusted Ebitda up 49% to £84.5m; pre-tax profit up 38% to £59.9m; and net cash on hand at the end of the year rising by £57.7m to £190.7m. That might seem like a fairly dry set of numbers, but even anyone averse to scrolling through balance sheets simply has to say “wow”.
Within that, the most mature of its brands (Boohoo itself) saw slower growth but it was far from weak. Its revenue grew 16% to £434.6m (15% currency-neutral) and the gross margin was up 170bps to 52.9%. Its active customer numbers rose 9% to 7 million and international now makes up 44% of its revenue. It also said that BoohooMAN has performed strongly with an extensive product range and increasing customer reach.
PrettyLittleThing (in which it owns a majority, but not a 100%, stake) motored ahead by 107% to reach revenue of £374.4m with the gross margin rising 140bps to 56.6%. Its active customer numbers rose 70% to 5 million and the company said its high-profile celebrity associations are driving traffic while international expansion is seeing it doing “exceptionally well” in the US. The company has also geared itself up for further fast growth with investment in larger and automated distribution facilities for the brand.
And its acquired US operation, Nasty Gal (which retails at a higher price than the group’s other labels), saw revenue rising 96% (or 100% currency-neutral) to £47.9m. However, the gross margin here dropped as much as 290bps to 56.7%, although it stayed in line with PLT’s and beat the Boohoo brand’s margin. Active customers were up 122% to 0.9 million and as well as strong growth in its domestic market , its “international appeal and revenue [are] growing rapidly.” In fact, awareness of the brand is growing fast in the UK and Britain is now its second biggest market.
And this all looks set to continue with trading in the first few weeks of the new financial year having been “encouraging”. Group revenue growth for the financial year is expected to be 25% to 30% with an adjusted Ebitda margin of around 10%. Longer term, it expects a revenue rise of 25% to continue into future years.
CEO John Lyttle, freshly arrived from Primark, said of all this: “I am very excited to have joined the group at this key stage of its growth. The group's investments into its brands and infrastructure have allowed it to develop a scalable multi-brand platform that is well-positioned to disrupt, gain market share and capitalise on what is a truly global opportunity.”
And the company really is thinking globally. It said its focus on key international markets has been “highly successful, producing growth of 64% and increasing international revenues to 43% of total revenue.”
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