BOO Turnaround ???8 May 2024 19:05
Despite the profit and sales drop, there are early signs of recovery at the business including a positive trend in the performance of its core brands: Boohoo, BoohooMan, PrettyLittleThing, Karen Millen and the Debenhams marketplace.
Adjusted EBITDA margin rose from 3.6% in 2023 to 4%. CEO John Lyttle attributed the improvement to the automation of its Sheffield warehouse and the traction of Debenhams marketplace, which has onboarded more than 3,500 brands across fashion, beauty and home.
The company said it remains on track to deliver annualised cost savings of £125m across cost of goods, supply chain and overheads in FY25.
John Stevenson, analyst at investment bank Peel Hunt, said: “What Boohoo has been doing in the last 12 months is controlling the controllable [including] working on cost-savings and focusing on margin recovery, which are coming through.
“You can see success when you look behind the details of the numbers. Debenhams has been building quickly both in terms of the scale of the platform and the level of revenue. ”
Looking ahead, Boohoo Group is targeting GMV [general merchandise value] growth and continued improvements in adjusted EBITDA margin.
Stevenson said: “Trading is still tough but I think the momentum has improved. It’s all eyes on where we get to as the year goes on but there will be an expectations that we start to see signs of growth coming towards autumn.”