Boohoo.com, the online clothing retailer, had a very happy end to 2015.
In a trading statement released on Tuesday morning, the company said that in the four months to the end of 2015 it grew revenues by a massive 45%, and has completely smashed any expectations for the company’s performance.
Total revenues are now at £73.7 million ($107 million), up from £50.8 million ($73.8 million) over the same period last year.
Forecasts had put Boohoo’s revenue growth at an expected 31%, but the real number is far more impressive, and reflects what the company calls “increased order frequency” and “lower customer acquisition costs”.
Essentially, it is getting customers to buy more stuff, and having to spend less to bring in new ones, a pretty handy combination.
Boohoo’s stellar Christmas period sent shares in the AIM listed company soaring, jumping by nearly 5% at the open. As of 8:15 a.m. GMT (3:15 a.m. ET) the company’s stock is up 5.5%.
The end of 2015 couldn’t have been much different to the previous one for Boohoo. Shares tanked more than 40% after last year’s January trading update, which reported that the group’s rate of sales growth had more than halved. This was blamed on unseasonably warm weather, big price cuts across the industry, and problems with delivering goods.
Along with the company’s massive boost in UK revenues, other highlights in the company’s trading statement included:
- Revenues in the rest of Europe up 33%, and 52% in the rest of the world.
- Retail gross margin fell to 57.0% from 59.1% a year earlier. The company blamed this on investing in the customer experience, and in keeping prices low.
- Overall, gross margin 55.7% thanks to growth in third party sales.
- 3.9m active customers, up 33% on prior year.
- £58.7m cash on balance sheet.
Boohoo’s stellar Christmas has also allowed them to increase their expectations for the full year. In a statement released by joint CEOs Mahmud Kamani and Carol Kane said (emphasis ours):
“Our investments in the customer proposition have resulted in higher conversion rates, increased order frequency and lower customer acquisition costs. Operational successes include the new warehouse extension entering into full service, giving us the capacity required for business expansion, and the new UK app, which has improved the overall shopping experience.
We remain confident of trading in the remaining two months of the financial year and now expect revenue growth for the full year to be marginally above previous guidance of 30% to 35%. We are trading in line with current market expectations for EBITDA as we continue to invest in driving growth and building market share across our key markets.”