Boohoo Downgrades Fiscal Year Guidance on Covid-19 Uncertainty – Update
By Sabela Ojea
Boohoo Group PLC on Thursday said it had downgraded its forecast for full-year net sales growth and adjusted EBITDA margin due to heightened consumer uncertainty over the novel variant of the coronavirus.
The London-listed online fashion retailer said it now expects its net sales to grow in the range of 12% to 14% for the fiscal year ended Feb.28, down from its previous growth forecast of 20 to 25%.
The company said its adjusted profit margin before interest, taxes, depreciation and amortization is now also expected to be between 6% and 7%, down from previous forecast of 9% to 9.5%, implying a Adjusted EBITDA between 117 million. and 139 million pounds ($ 155.2 million – $ 184.3 million).
Boohoo’s current expectations are the result of significantly higher return rates, which are hurting net sales and cost growth, and continued disruption of its international delivery proposition, which is also affecting its international demand.
All of the company’s international sales are currently made from its UK distribution network, he reported.
The company said total net sales for the third quarter of fiscal 2022 reached £ 506.2million, up from £ 460.7million a year earlier, marked by significant growth in the UK .
Total net sales reached £ 320.3million in the UK for the quarter, compared to £ 243.6million for the period a year earlier.
Boohoo said its performance in the United States fell to £ 104.6million in net sales, down from £ 121.3million for the period a year earlier. “Performance in the United States did not experience the previously anticipated recovery due to the continued impact of reduced air cargo capacity on delivery times to customers,†he said.
Regarding its performance in Europe, Boohoo said that while it saw strong signs of a recovery in September, revenues on the continent declined at the end of the third quarter amid heightened consumer uncertainty.
Write to Sabela Ojea at [email protected]; @sabelaojeaguix