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REG - boohoo group plc - Trading Update

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RNS Number : 0578P  boohoo group plc  16 June 2022

 
            16 June 2022

 

 

boohoo group plc - trading statement for the three months to 31 May 2022

 

 

                      Three months to 31 May
 £ million            FY23    FY22    Change on FY22                                           CER((1))  Change on FY20
 Group total revenue  445.7   486.1                             -8 %                           -8%       +75%
 Revenue by region
   UK                 272.1   274.6   -1%                                                      -1%       +94%
   ROE((2))           49.6    54.4    -9%                                                      -7%       +30%
   USA                95.0    131.9   -28%                                                     -26%      +85%
   ROW((3))           29.0    25.2    +15%                                                     +15%      +20%

 

(1) CER designates Constant Exchange Rate translation of foreign currency
revenue. (2) ROE is rest of Europe. (3) ROW is rest of world.

 

Financial highlights

·    Due to lockdowns driving prior year comparative strength, and in line
with prior guidance, revenues declined 8% in the quarter, but up 75% over the
three-year pre-pandemic period reflecting multi-year market share gains across
the Group's multi-brand platform

·    As expected, gross demand growth remained positive against tough
comparatives, +9% year-on-year, with net sales impacted by the ongoing
normalisation of returns due to product mix change

·    UK sales improved month-on-month in the period and returned to net
sales growth in May. Underlying gross demand remained strong +21% as our
leading proposition continues to resonate with customers

·    International performance continued to be impacted by increased
delivery times, although wholesale drove growth in ROW and contributed to
ROE's performance

·    Gross margin for the three months 52.8%, down 220bps vs. a strong
prior year comparative, but up 240bps vs. the second half of the previous
financial year, and improved through the quarter

 

Progress against strategic priorities

At the full year results in May, the Group outlined a series of actions
focussed on optimising its operations and best positioning itself to rebound
strongly as pandemic-related headwinds ease, and is pleased with the continued
progress made in these areas, as outlined below:

·    Sourcing and freight

The Group has continued to increase sourcing from near-shore markets to reduce
exposure to elevated inbound freight costs, with a 10 percentage point
increase in short-lead time product mix compared to the same period last year

·    Stock management and returns

Inventory has been tightly controlled in the quarter, with lower levels of
stock compared to year end and improvements in inventory turn and increased
supply chain flexibility

·    Cost management

Overheads continue to be managed tightly despite the significant inflationary
backdrop through scaling of acquisitions and improved marketing efficiencies

·    Unlocking strategic enablers

Continued progress has been made on key strategic projects, with the
automation project in Sheffield still anticipated to go-live in H2 of this
financial year. The Group has signed a lease for a new distribution centre in
Elizabethtown, Pennsylvania, to support its international growth ambitions and
transform the customer proposition in a key focus market, with go-live still
anticipated in mid-2023. Wholesale continues to scale with one UK partnership
launched in the quarter.

 

Guidance

The Group's outlook for the year ending 28 February 2023 remains unchanged.
Revenue growth for FY23 is expected be low-single digits, with a return to
growth in Q2 and growth rates improving in the second half of the year as the
Group annualises high returns rates and normalising consumer demand. Adjusted
EBITDA margins are expected to be between 4% and 7%, in line with prior
guidance, as the Group continues to be affected by pandemic-related and
inflationary factors that negatively impact costs within its supply chain and
international competitive proposition, offset to some extent by the financial
benefits from our strategic priorities and leveraging of overheads.

 

John Lyttle, CEO, commented:

"I am pleased with the progress we are making towards our strategic
priorities, which is already having a meaningful impact operationally within
the business. We have seen promising signs from the Group's sales performance
in the UK, which has improved month-on-month in the period and we are looking
ahead towards our key summer trading season as holidays ramp up and customers
look to the latest fashion from across our brands. Looking forward, we will
continue to focus on optimising both our financial and operational performance
to ensure the business is well placed to take advantage of future growth
opportunities."

 

Investor and analyst conference call

boohoo group plc will today host a conference call for analysts and investors
at 8.30am BST. The dial in details for the call are as follows:

 

 UK Number:             +44 (0)330 165 4012
 Participant pin code:  1722259
 Webcast link:          https://stream.brrmedia.co.uk/broadcast/62a0c5fc19aa2a662fe172a9
                        (https://stream.brrmedia.co.uk/broadcast/62a0c5fc19aa2a662fe172a9)

 

Notice of half year results

The Group intends to publish its Half Year results for six months ended 31
August 2022 on 28 September 2022

 

 Enquiries
 boohoo group plc
 Neil Catto, Chief Financial Officer                                      Tel: +44 (0)161 233 2050
 Alistair Davies, Investor Relations                                      Tel: +44 (0)161 233 2050
 Clara Melia, Investor Relations                                          Tel: +44 (0)20 3289 5520
 Mark Mochalski, Investor Relations                                       Tel: +44 (0)20 3239 6289

 Zeus Capital - Nominated adviser and joint broker
 Nick Cowles / Andrew Jones                                               Tel: +44 (0)161 831 1512
 Benjamin Robertson                                                       Tel: +44 (0)20 3829 5000

 Jefferies - Joint broker
 Philip Noblet / Max Jones                                                Tel: +44 (0)20 7029 8000

 Buchanan - Financial PR adviser                                          boohoo@buchanan.uk.com
 Richard Oldworth / Kim Looringh-van Beeck / Toto Berger / Verity Parker  Tel: +44 (0)20 7466 5000

 

 

About boohoo group plc

 

"Leading the fashion eCommerce market"

 

Founded in Manchester in 2006, boohoo is an inclusive and innovative global
brand targeting young, value-orientated customers, pushing boundaries to bring
its customers up-to-date and inspirational fashion, 24/7.

In 2017, the group extended its customer offering through the acquisitions of
the vibrant fashion brand PrettyLittleThing and free-thinking brand Nasty Gal.
In March 2019, the group acquired the MissPap brand, in August 2019 the Karen
Millen and Coast brands and in June 2020 the Warehouse and Oasis brands, all
complementary to the group's scalable, multi-brand platform. In January 2021,
the group acquired the intellectual property assets of Debenhams, with the
goal of transforming a leading UK fashion and beauty retailer into a digital
department store and marketplace through a new capital-light and low-risk
operating model. In February 2021, the group acquired the intellectual
property assets of UK brands Dorothy Perkins, Wallis and Burton. As at 28
February 2022, the boohoo group had 20 million active customers across all its
brands around the world.

 

Cautionary Statement

Certain statements included or incorporated by reference within this
announcement may constitute "forward-looking statements" in respect of the
group's operations, performance, prospects and/or financial condition.
Forward-looking statements are sometimes, but not always, identified by their
use of a date in the future or such words and words of similar meaning as
"anticipates", "aims", "due", "could", "may", "will", "should", "expects",
"believes", "intends", "plans", "potential", "targets", "goal" or "estimates".
By their nature, forward-looking statements involve a number of risks,
uncertainties and assumptions and actual results or events may differ
materially from those expressed or implied by those statements. Accordingly,
no assurance can be given that any particular expectation will be met and
reliance should not be placed on any forward-looking statement. Additionally,
forward-looking statements regarding past trends or activities should not be
taken as a representation that such trends or activities will continue in the
future. No responsibility or obligation is accepted to update or revise any
forward-looking statement resulting from new information, future events or
otherwise. Nothing in this announcement should be construed as a profit
forecast. This announcement does not constitute or form part of any offer or
invitation to sell, or any solicitation of any offer to purchase any shares or
other securities in the Company, nor shall it or any part of it or the fact of
its distribution form the basis of, or be relied on in connection with, any
contract or commitment or investment decisions relating thereto, nor does it
constitute a recommendation regarding the shares or other securities of the
Company. Past performance cannot be relied upon as a guide to future
performance and persons needing advice should consult an independent financial
adviser. Statements in this announcement reflect the knowledge and information
available at the time of its preparation. Liability arising from anything in
this announcement shall be governed by English law. Nothing in this
announcement shall exclude any liability under applicable laws that cannot be
excluded in accordance with such laws.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix - prior period revenues by region

 

Revenue by period for the 3 months to 31 May 2022 (FY23)

 

 £m     3m to 31 May
        FY23   FY22   yoy %  yoy % CER
 Total  445.7  486.1  -8%    -8%
 Revenue by region
  UK    272.1  274.6  -1%    -1%
  ROE   49.6   54.4   -9%    -7%
  USA   95.0   131.9  -28%   -26%
  ROW   29.0   25.2   +15%   +15%

 

Revenue by period for the year to 28 February 2022 (FY22)

 

 £m     4m to 31 December               2m to 28 February           12m to 28 February
        FY22   FY21   yoy %  yoy % CER  FY22   FY21   yoy %  yoy %  FY22     FY21     yoy %  yoy %

                                                             CER                             CER
 Total  714.5  660.8  8%     9%         292.5  268.0  9%     9%     1,982.8  1,745.3  14%    14%
 Revenue by region
  UK    451.0  356.7  26%    26%        182.3  158.3  15%    15%    1,202.8  945.1    27%    27%
  ROE   79.9   90.3   -11%   -11%       34.9   30.5   14%    13%    219.2    244.7    -10%   -9%
  USA   145.8  168.2  -13%   -12%       55.4   64.6   -14%   -13%   451.6    435.1    4%     4%
  ROW   37.8   45.6   -17%   -16%       19.8   14.6   36%    34%    109.2    120.4    -10%   -8%

 

 £m     3m to 31 May                    3m to 31 August             6m to 31 August
        FY22   FY21   yoy %  yoy % CER  FY21   FY20   yoy %  yoy %  FY21   FY20   yoy %  yoy %

                                                             CER                         CER
 Total  486.1  367.8  32%    32%        489.8  448.7  9%     10%    975.9  816.5  20%    20%
 Revenue by region
  UK    274.5  183.0  50%    50%        294.9  247.2  19%    19%    569.4  430.2  32%    32%
  ROE   54.4   63.4   -14%   -12%       50.0   60.3   -17%   -16%   104.4  123.7  -16%   -14%
  USA   131.9  92.0   43%    40%        118.6  110.2  8%     9%     250.5  202.2  24%    23%
  ROW   25.2   29.4   -15%   -10%       26.3   31.0   -15%   -18%   51.5   60.4   -15%   -14%

 

CER in this appendix for the year ended 28 February 2022 is calculated using
exchange rates prevailing during the year ending 28 February 2022.
Nomenclature: ROE - rest of Europe; ROW - rest of world; yoy - year-on-year;
CER - constant exchange rate

 

 

Revenue by period for the year to 28 February 2021 (FY21)

 

 £m     4m to 31 December               2m to 28 February           12m to 28 February
        FY21   FY20   yoy %  yoy % CER  FY21   FY20   yoy %  yoy %  FY21     FY20     yoy %  yoy %

                                                             CER                             CER
 Total  660.8  473.7  40%    40%        268.0  196.3  37%    36%    1,745.3  1,234.9  41%    41%
 Revenue by region
  UK    356.7  255.8  39%    39%        158.3  108.5  46%    46%    945.1    679.4    39%    39%
  ROE   90.3   69.6   30%    32%        30.5   31.4   (3)%   (1)%   244.7    188.4    30%    30%
  USA   168.2  110.6  52%    51%        64.6   42.3   53%    46%    435.1    263.6    65%    63%
  ROW   45.6   37.7   20%    24%        14.6   14.1   3%     11%    120.4    103.5    16%    19%

 

 £m     3m to 31 May                    3m to 31 August             6m to 31 August
        FY21   FY20   yoy %  yoy % CER  FY21   FY20   yoy %  yoy %  FY21   FY20   yoy %  yoy %

                                                             CER                         CER
 Total  367.8  254.3  45%    45%        448.7  310.5  44%    44%    816.5  564.9  45%    44%
 Revenue by region
  UK    183.0  140.6  30%    30%        247.2  174.4  42%    42%    430.2  315.0  37%    37%
  ROE   63.4   38.2   66%    65%        60.3   49.2   23%    21%    123.7  87.5   41%    40%
  USA   92.0   51.3   79%    83%        110.2  59.4   86%    83%    202.2  110.7  83%    83%
  ROW   29.4   24.2   22%    22%        31.0   27.5   12%    14%    60.4   51.7   17%    18%

 

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