Jan 15, 2019
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Boohoo surges in autumn/Christmas season, raises guidance

Jan 15, 2019

As the UK’s Christmas trading update season continues, one of the names everyone expected to do well, Boohoo Group, released its figures on Tuesday morning. So did it live up to expectations?


It seems so. No, make that ‘yes, definitely’. The company said that in the four months to December 31, its total group revenue soared as much as 44%, or 43% on a currency-neutral (CN) basis. That’s pretty impressive by anyone’s standards.

OK, we could quibble a bit and note that in the 10 months to the end of the December, the increase was 47% (or 46% CN) so there was clearly a slight slowdown at the back end of 2018. But that slowdown doesn’t seem to have dented Boohoo’s growth trajectory in any meaningful way.

It all meant that the group’s total revenue in the short period reached £328.2 million and in the longer one it reached £723.5 million.

The company’s release was headlined “strong growth across all brands in all regions” and that must be pleasing for the management team as it appears to have no brands that need a bit of nursing, a rare situation even for successful companies at the moment.

Looking at the regional picture, the UK rose 33% to £180 million in the four months and 38% to £414 million in the 10 months so the slowdown there was obviously a bit more pronounced. This is really no surprise given how tough the UK market was in the autumn/winter/Christmas season. 

The Rest of Europe region saw sales rising 57% (or 54% CN) to £44.4 million in the latest few months, which was slower than the 71% (or 63% CN) to £95.7million in the longer period. A slowdown yes, but not one that looks likely to cause the company any major concerns given the macroeconomic environment at present.

By contrast, the US accelerated in the latest four months. Its growth was 78% (or 80% CN) to £70.4 million compared to a 75% increase (or 77% CN) to £138.6 million in the 10 months.

Nasty Gal

The Rest of the World speeded up too. Its revenues rose 35% (or 32% CN) to £33.4 million in the four months and 32% (or 29% CN) to £75.2 million in the longer period.

Further good news came as the group gross margin for the four months rose 170bps to 54.2%.

So how did it do at brand level? Boohoo was the ‘weakest’ - if a 15% revenue rise (or 14% CN) can be called weak. Interestingly though, in the full year to date, its revenue also rose 15% on a total basis but only 13% CN, so the four-month currency-neutral growth was greater. It looks like, despite the brand’s maturity, in the four months it was still winning more new fans. And its gross margin rose 150bps to 52.2%.

The company’s PrettyLittleThing label is very far from being a mature brand. Its growth in the four months was an astonishing 95% (or 96% CN) to £144.2 million and it rose 114% (or 115% CN) to £312.8 million for the year so far. The gross margin in the four months rose 110bps to 56.4%.

At Nasty Gal, the four-month revenue rise was 74% (or 76% CN) to £20.6 million. And it rose 89% (or 93% CN) to £38.3 million for the full-year to date. The gross margin in the four months rose to 54.4% from 55.3%.

Yes, that’s a lot of figures to take in, but it’s worth trying because it really paints a full picture of the company and just how stratospheric its growth is. And here are some more figures: the company expects its group revenue for the full 12 months to February 28 to be up between 43% and 45%, which is ahead of previous guidance of a range between 38% and 43%. 

And the group adjusted EBITDA margin should sit between 9.25% and 9.75%, narrowing the range from the 9% to 10% as previously guided. 

If anyone was looking for signs that Boohoo’s fast growth is set to slow down any time soon, they would be hard-pressed to find them in this report.

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