LONDON — Online fashion retailer Boohoo announced surging revenue and profits on Wednesday, as it published its full-year results.
The Manchester-based company published these figures for the year end February 28, 2017:
- Revenue: up 51% to £294.6 million;
- Pre-tax profit: up 97% t0 £30.9 million;
- Gross margin: down 320bps to 54.6%.
Revenue growth is slightly above what the market was expecting, despite several forecast upgrades from the retailer in the year.
Boohoo’s UK sales jumped 33%, while European sales rose 50%, and USA sales surged 140%. The retailer, which primarily targets young women, now has 5.2 million customers.
The company’s joint CEOs and cofounders, Mahmud Kamani and Carol Kane, call it a “momentous year” in a joint statement. They said:
“The boohoo brand has achieved outstanding revenue growth and increased profitability margins during the year. We continued to grow strongly in the UK, our largest market, whilst international growth exceeded our expectations, particularly in the USA. Our customer proposition is proving consistently appealing.”
Kamani and Kane also flag the importance of recent acquisitions: the retailer acquired a majority stake in rival PrettyLittleThings at the start of the year and bought US retailer Nasty Gal out of bankruptcy earlier this year.
The CEOs said: “Both brands have huge potential and the acquisitions represent a step change in the size, structure and operation of the group.”
Not only has Boohoo recorded storming growth in the last year, the company are expecting the performance to continue, thanks in part to the deals. Kamani and Kane expect revenue growth of 50% again next year. They add that it has been “a promising start” to the 2018 financial year so far.
Jefferies, Boohoo’s house broker, said in a note on Wednesday morning:
“Despite a further slowdown in the boohoo brand’s UK sales growth to 25% in the final 2 months of FY17, and arguably modest guidance of 25% in the core boohoo brand for FY18E, the early stage growth of PrettyLittleThing and Nasty Gal in addition to promising initiatives in the core boohoo business make for an exciting investment story.”
Like ASOS, Boohoo is one of the UK’s online fashion success stories. Founded in 2006, the company specialises in offering fashionable clothes for women at cheap prices and has a very quick turn around time from design to production, meaning it can keep on top of the latest trends. 70% of Boohoo’s traffic comes from mobile apps.