Boohoo Forecasts Revenue Slowdown, Profits Drop 28 Pct

Words by Retail Bum

Boohoo Forecasts Revenue Slowdown, Profits Drop 28 Pct
Boohoo Forecasts Revenue Slowdown, Profits Drop 28 Pct
Boohoo saw a 28% decline in annual core earnings due to significant freight and logistics costs and rising inflation — factors the British fashion retailer expects to continue to impact its performance this year.

The company, which sells apparel, accessories, and beauty products to 18-to-40-year-olds, reported $156 million in adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) for the year leading to February 28, down from $217 million in 2020-2021. Its revenue was up 14% to $2.4 billion

For 2022-2023, the company is expecting low single-digit growth in revenue and adjusted EBIDTA of 4% to 7%, compared to 6.3% in 2021-2022, Reuters reported. The decline in revenue growth will result from pandemic-related factors that negatively impact costs associated with its supply chain.

While the company is forecasting revenue growth to be primarily flat in the first half of the fiscal year due to higher return rates in the first quarter, it is reportedly expecting improvements in the second half of the year.

Looking ahead, the company said it is setting its focus on retaining the market gains it has made throughout the pandemic. It aims to increase operational efficiencies and avoid passing costs onto its customers, which should help sustain sales.

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