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Boohoo's sales soar as its expansion continues apace

Boohoo’s revenue soared by 41% to £58.2m in the three months to May 31, compared to the same period last year.

Boohoo June 2016  3

The Manchester-based etailer enjoyed a strong performance in its domestic market, with UK sales rising 42% to £37.4m.

Sales in the rest of Europe were up 40% to £6.9m, while in the rest of the world they rose 37% to £13.9m. International sales now account for 36% of the total.

Its retail gross margin slipped by 300 basis points to 57.6%. Boohoo said this was due to planned investments in its pricing and customer proposition. It said the fall was offset by a reduction in its marketing expenditure as a percentage of sales.

Its overall gross margin was 56% and its active customer base rose 30% year on year to 4.2 million.

It had £61m cash on its balance sheet at the close of the period.

Joint chief executives Mahmud Kamani and Carol Kane said: “We are encouraged by our performance in the first quarter, with revenue growth in all geographic regions and slightly ahead of our expectations. Our international business continues to gather momentum.

“Profitability has improved as marketing expenditure, as a percentage of revenue, has been reduced, in line with our strategy of improving the customer proposition to build customer lifetime value.

“We continue to broaden our product range, increase our fashion appeal and offer incredible prices. Active customer numbers, order frequency, basket size and conversion continue to climb.”

Boohoo’s warehouse expansion programme continued and it has nearly completed the fit-out of three additional mezzanine floors. Planning is underway for a new building on the adjacent site, to meet its growing capacity requirements.

The etailer now expects sales growth for the full year of 25% to 30%. It expect EBITDA margins in line with last year although it said it would “look at opportunities to drive incremental growth by investing in the customer proposition and our international markets”.

 

 

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