RE: Broker updates as requested15 Jan 2020 10:29
Hargreaves: Boohoo’s road is paved with gold
Online fashion retailer Boohoo (BOO) is walking a road ‘paved with gold’ after upgrading guidance again, says Hargreaves Lansdown.
The group is expecting full-year revenue growth of between 40% and 42%, ahead of previous guidance of 33% to 38%, and reflecting record trading in the last four months of 2019.
Analyst Sophie Lund-Yates said the fashion group was ‘packing a serious punch’ in contrast to many traditional retailers.
It also has a ‘pocket of opportunity’ from the successful integration of its newly-acquired Coast and Karen Millen brands, which ‘widens its appeal’.
‘Boohoo’s operating model is well placed to keep up with the frantic pace of today’s fashion, but there are some risks involved with growing at such an advanced pace,’ said Lund-Yates.
‘We can’t fault Boohoo’s expansion efforts so far, but continued growth will require new infrastructure in the future, and that brings execution risk. For now though, the group’s walking a road paved with gold.’